LIBRARY 
 
 UNIVERSITY OF CALIFORNIA. 
 Deceived IAN 19 1893.,^ ^_ 
 ^Accessions No.H<M~l~l . Class No. 
 
 , 
 

 
 . 
 
A TREATISE ON 
 
 CO-OPERATIVE SAVINGS AND 
 LOAN ASSOCIATIONS 
 
 INCLUDING 
 
 BUILDING AND LOAN ASSOCIATIONS 
 
 MUTUAL SAVINGS AND LOAN ASSOCIATIONS 
 
 ACCUMULATING FUND ASSOCIATIONS 
 
 CO-OPERATIVE BANKS, ETC. 
 
 WITH APPENDIX CONTAINING- LAWS, PRECEDENTS, 
 AND FORMS. 
 
 BY 
 
 SEYMO 
 
 NEW YORK 
 
 D. APPLETON AND COMPANY 
 1891. 
 

 COPYRIGHT, 1889, 
 BY D. APPLETON AND COMPANY. 
 
PREFACE. 
 
 No form of direct co-operation among men of 
 limited means is attracting more attention at the pres- 
 ent time than the class of associations which we have 
 grouped under the name of Co-operative Savings and 
 Loan Associations. 
 
 Professor F. B. Sanborn, Secretary of the Ameri- 
 can Social Science Association, at its annual meet- 
 ing at Saratoga in September, 1888, in a report 
 the most complete ever made in this country relat- 
 ing to them said very truthfully that " at the rate 
 the building associations are now gaining, the time 
 may come when their accumulated savings at any one 
 time may exceed those of our saving-banks, and it 
 is doubtful if any system of savings has been de- 
 vised which has such a tendency to produce frugality 
 among persons of small incomes as the building- 
 association methods." 
 
 Their business methods have been little under- 
 
IV PREFACE. 
 
 stood in the past outside of those engaged in con- 
 ducting them. 
 
 From Philadelphia, as their " breeding-place," they 
 have spread throughout the country, chiefly through 
 the agency of persons, who, being interested in an 
 association in one locality, have migrated to another 
 and become the moving spirit and authority in organ- 
 izing one where they were unknown before, each asso- 
 ciation becoming a new center from which knowledge 
 concerning them has radiated to other localities. 
 
 In this manner faulty methods were copied and 
 transmitted from one place to another as readily as 
 good ones, and it has often occurred that the organ- 
 izers of the new association but imperfectly compre- 
 hended the scheme which they were attempting to 
 put into operation, and unwittingly modified it, while 
 in other cases changes were made to secure some 
 benefit to those managing it which the original plan 
 did not contemplate. The legislation in nearly all the 
 States has been crude and general in its provisions, 
 thereby permitting speculative features to be added to 
 the beneficial methods, by visionary men, as well as by 
 those who were seeking solely their own advantage. 
 
 Information concerning these associations in books 
 or current literature has not only been meager and 
 fragmentary, but quite inaccessible to those wishing 
 to learn their manner of conducting business, or to 
 investigate the benefits accruing therefrom. 
 
PREFACE. v 
 
 From these causes a great diversity in their meth- 
 ods has come to pass in different parts of the country, 
 and many variations in the details of the same general 
 method in the same locality. As found at the present 
 time, they are a natural development in direct co- 
 operation which has come to pass with but little 
 guidance or supervision by the State. While the his- 
 tory of such development must record many failures, 
 when considered as a whole they have been more 
 uniformly successful and attained better economic re- 
 sults for those interested than any other form of 
 direct co-operation undertaken in this country, and 
 are now attracting widespread attention as "institu- 
 tions for savings," their friends claiming for them 
 advantages which the savings-bank does not possess. 
 
 Our aims in the preparation of this book have 
 been 
 
 1. To fill an apparent demand for information re- 
 lating to this form of co-operation, and to place such 
 information in a form accessible to all desiring it. 
 
 2. To explain the principles upon which the typi- 
 cal association is founded in such a manner that the 
 reader who is seeking general information on the sub- 
 ject may readily understand. 
 
 3. To describe the important variations from the 
 typical association now in operation, tracing their de- 
 velopment and the causes which have induced them, 
 and discussing briefly their respective merits. 
 
vi PREFACE. 
 
 4. To furnish a complete guide to all persons 
 wishing to organize and conduct them upon methods 
 that are safe, equitable, and uniformly successful 
 when adhered to. 
 
 5. To correct certain false notions which are often 
 entertained by those conducting these associations re- 
 lating to the subject of premiums, and the benefits 
 accruing to the borrowers therefrom, by reason of 
 dividends added to the shares of stock upon which 
 they have borrowed. 
 
 6. To print, in a convenient form for examina- 
 tion, the best statutes in this country authorizing 
 their formation, and to recommend to those inter- 
 ested in legislation relating to these associations the 
 New York act of 1887 and the laws of Massachusetts. 
 
 We are earnestly desirous of encouraging the 
 growth of this form of co-operation upon simple, 
 safe, and equitable methods, believing that when so 
 conducted these associations are the most potent 
 agency for stimulating steady savings, industry, home- 
 owning, and good citizenship, yet devised and put 
 into operation. 
 
CONTENTS. 
 
 CHAPTER I. 
 
 PAGE. 
 
 CO-OPERATION, INDIRECT AND DIRECT 1 
 
 CHAPTER II. 
 
 SOME OF THE BENEFITS OF CO-OPERATIVE SAVINGS AND 
 LOAN ASSOCIATIONS 9 
 
 CHAPTER III. 
 
 TYPICAL " CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS " 16 
 
 CHAPTER IV. 
 
 THE GROWTH AND SPREAD OF CO-OPERATIVE SAVINGS AND 
 BUILDING-LOAN ASSOCIATIONS ..... 41 
 
 CHAPTER V. 
 
 A REVIEW OF THE DEVELOPMENT OF THE SCHEMES UPON 
 WHICH CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS 
 HAVE BEEN AND ARE NOW CONDUCTED . . . .70 
 
 CHAPTER VI. 
 
 WHICH OF THE SEVERAL SCHEMES CONSIDERED is BEST . 96 
 
viii CONTENTS. 
 
 CHAPTER VII. 
 
 PAGE 
 
 HOW TO ORGANIZE A Co-OPERATIVE SAVINGS AND LOAN 
 ASSOCIATION UNDER THE NEW YORK ACT OF 1887 . 113 
 
 CHAPTER VIII. 
 
 HOW TO ORGANIZE ASSOCIATIONS UNDER THE NEW YORK 
 ACT OF 1851, AND IN ANY STATE WHERE THE LAW 
 DOES NOT PROVIDE A DEFINITE SCHEME . . . 138 
 
 CHAPTER IX. 
 How TO KEEP ACCOUNTS 179 
 
 APPENDIX. 
 
 LAWS OF NEW YORK 209 
 
 LAWS OF PENNSYLVANIA , c ..... 229 
 LAWS OF MASSACHUSETTS ....... 236 
 
 LAWS OF OHIO 244 
 
 FORMS 247 
 
 INDEX . . 295 
 
CO-OPERATIVE SAYINGS 
 AND LOAN ASSOCIATIONS. 
 
 CHAPTER I. 
 
 CO-OPERATION, INDIRECT AND DIRECT. 
 
 THE word co-operation is a generic term. There 
 are many species of co-operation, and each species has 
 many varieties. Some are direct, and others are in- 
 direct. 
 
 The earliest and most universal form of co-opera- 
 tion is government. This is one species. It has many 
 varieties, and the greater number have been conducted 
 in the interest of special classes. Reigning classes 
 have considered the masses of the people unfit to have 
 a voice in the control of the government, as fit only to 
 be subjects, whose highest duty was to obey. They 
 were zealously taught the " divine right of kings " to 
 rule. With the reigning class there was a direct co- 
 operation in government ; with the masses only an in- 
 direct. While the latter loyally obeyed the laws and 
 submitted to the commands of their rulers order and 
 stability prevailed. Comparative security from foreign 
 enemies and from personal violence within was thereby 
 obtained. The preservation of the family and the pos- 
 sibility of peaceful living were better than anarchy, 
 where none were safe from rapine and personal vio- 
 
2 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 lence, where every man must stand guard over his own 
 person, family, and property. 
 
 The struggles, the conflicts, and the failures have 
 been manifold in the endeavors, by the masses, to se- 
 cure a government which should be conducted for all 
 classes alike. It is the pride of our country that di- 
 rect governmental co-operation has been attained, a 
 government by the people and for the people. The 
 fame of its liberties has indeed encircled the globe. 
 No more sacred duty calls upon us than to discharge 
 to the best of our ability the obligations of our citizen- 
 ship. Whoever proves himself unworthy of member- 
 ship in this grand co-operation is unfit to become a 
 member of any other direct co-operation. The Ameri- 
 can citizen that will sell his vote or betray a public 
 trust, or seek to induce another to do so, deserves only 
 to obey the mandates of a kingly power. 
 
 Keligious organizations constitute another species 
 of co-operation. With us, these organizations have no 
 power of compulsion; they are voluntary. There is 
 direct co-operation of all who unite to secure the ends 
 for which the organizations exist. Divorced from the 
 state, they stand upon their own merits. The good 
 they accomplish is measured by the individual worthi- 
 ness of their members. The church-member who 
 proves himself unworthy to be a member in the direct 
 co-operation of the church, proves himself unworthy 
 to be a member of any other direct co-operation, the 
 objects and aims of which are worthy. 
 
 Another species of co-operation has for its aim social 
 enjoyment. The normal man hates solitude ; he loves 
 the society of his fellows, whether at work or play. 
 The forms of direct co-operation for social enjoyment 
 
CO-OPERATION, INDIRECT AND DIRECT. 3 
 
 are various. Some are beneficent, others pernicious. 
 Some lift men and women into higher planes of 
 thought, arouse noble aspirations, and stir only pure 
 desires j while in others, each helps to hurl down the 
 manhood or the womanhood of the other; together, 
 they stifle worthy aspirations and fan impure desires, 
 and march down the broad avenues that lead to the 
 bottomless pit. 
 
 Another species of co-operation has for its object 
 education. It is one of the worthiest of our many co- 
 operations. There are many varieties, but the most 
 beneficent of them all are our free schools, which should 
 be cherished by every friend of direct co-operation. 
 We should study to improve them in their teachers 
 and appliances and multiply their advantages. They 
 are the stepping-stones to the attainment of mental 
 training and knowledge by the masses of our people, 
 such as shall make possible the successful development 
 and conducting of direct co-operations in the straggle 
 for food, clothing, shelter, and material prosperity. 
 
 Another species of co-operation has for its aim the 
 material welfare of those associated therein. Here, as 
 in the domain of government, the realm of religion, 
 social enjoyment, and education, there are many va- 
 rieties ; some are direct and some are indirect. Next 
 to government the most universal form of co-operation 
 is that which results from the " division of labor," or, 
 as it is called sometimes, " the organization of labor." 
 
 While we may count upon our fingers the grand 
 divisions of labor agriculture, mining, manufacturing, 
 trade, transportation, professional and personal serv- 
 ices, the various subdivisions of these divisions will 
 number more than a thousand. We are too apt to 
 
4 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 overlook the great co-operation arising out of the or- 
 ganization of labor, and neglect to give just credit to 
 the beneficent results arising therefrom. 
 
 The co-operation thus resulting is indirect. We 
 call it indirect for the reason that the divisions of la- 
 bor come to pass wholly from selfish motives, and to 
 secure individual gain, regardless of its effects upon 
 other men or classes of men ; nevertheless, the good 
 results are manifold-. The blacksmith learns and fol- 
 lows his trade solely for his individual gain ; although 
 wholly selfish in his motives and aims, he is not blame- 
 worthy. He comes to be an expert in his trade, and, 
 by reason of that expertness, he can produce more that 
 is beneficial to society, or, in other words, more of 
 wealth, than he can by being a " Jack of all trades and 
 master of none." He indirectly co-operates with the 
 carpenter, the cabinet-maker, the farmer, the tailor, 
 the merchant, and others. 
 
 While each of these, in his dealings with him, is 
 ever seeking to obtain the product of his labor as cheap 
 as he can, and obtain as high a price as he can for his 
 own products that he sells to him, yet the blacksmith 
 will secure the necessaries of life and many of its com- 
 forts in much greater quantity than he would if he 
 attempted to build his own house, construct his own 
 furniture, raise his own food, make his own clothes, 
 and effect no exchanges with any of them. Meager, 
 indeed, would be the quality and quantity of his food, 
 clothing, and shelter, if he had to obtain them from 
 nature, unaided by the indirect co-operation that results 
 from the division of labor. What is true of the black- 
 smith is true of every one else. 
 
 The merchant, while he seeks to buy as cheaply as 
 
CO-OPERATION, INDIRECT AND DIRECT. 5 
 
 he can and sell at as great an advance as he is able, 
 works out a most beneficent co-operation between those 
 of whom he buys and those to whom he sells. The 
 owners and managers of railroads build and conduct 
 them from the motive of personal gain, and quite re- 
 gardless, as a rule, as to how their business enterprise 
 may effect the material prosperity of those with whom 
 they come in contact. They have in many instances 
 been able to amass with great rapidity fortunes of such 
 magnitude as to almost become a menace to our free 
 institutions; nevertheless, they have been the means 
 of an indirect co-operation, beneficent in as great a de- 
 gree as the magnitude and success of their endeavors. 
 
 There are some classes in our community who are 
 wont to cry out in bitter terms against our whole in- 
 dustrial system, founded upon this division of labor, 
 and regard it solely as a mighty machine, whereby the 
 few despoil the many. That many evils have come to 
 pass must be conceded. 
 
 That many classes of laborers do not receive an 
 equivalent for the product of their labor can not be 
 truthfully denied ; that some men amass fortunes they 
 have not earned, and that there is the possibility of a 
 great increase in results for good, must appear to 
 all who intelligently and candidly review the results 
 of our competitive industrial organization. But let us 
 not overlook the good that has come and is still flow- 
 ing from it. 
 
 Let us keep clearly in mind that it is the highest 
 form of industrial co-operation that large masses of 
 society have yet been able to maintain successfully. 
 
 The day-laborer secures more of the necessaries of 
 life amid the grindings of industrial competition, al- 
 
6 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 though the employer retains the lion's share of the 
 results of his labor, than he could possibly secure if he 
 was laboring alone in "the struggle for existence." 
 Let us not tear down and destroy, and " fly to evils 
 that we know not of " ; but, as we attain wisdom and 
 experience, modify and add to. We believe there is a 
 better form of co-operation attainable, where each shall 
 help the other to increase the result of his labor, and 
 neither take from the other any part of that which his 
 labor has produced. 
 
 It is toward co-operation as an ideal industrial sys- 
 tem that large masses of our people are moving. In 
 theory it is enticing ; in practice it is difficult to attain. 
 The narrow selfishness of the average human activity 
 thwarts the most generous labor of the unselfish, chills 
 the enthusiasm and weakens the efforts of the philan- 
 thropic. 
 
 Let no man or class of men ever think that such a 
 system of direct co-operation can be thought out and 
 planned by the brain of man and put into successful 
 operation in all industrial activities and among all 
 classes, as a new scheme or creation, at any single epoch 
 in a nation's history. If ever attained it must grow 
 and develop as men grow wise and self -restrained 
 through long periods of time, and be tried by innumer- 
 able failures and great adversities. 
 
 As in the years gone by, the pioneers, advancing 
 westward, have here and there gone forth in the un- 
 broken forest, felled the trees, built the hut, and 
 through years that have lengthened into generations 
 of father and son, the son taking up the work of the 
 father, or a new comer occupying the abandoned be- 
 ginning, gradually, with unremitting toil, widening 
 
CO-OPERATION, INDIRECT AND DIRECT. f 
 
 the clearings, improving the land, until, by-and-by, 
 clearings opened into clearings, and productive farms 
 joined farm to farm, and the prosperous agricultural 
 community came to pass ; so must be the beginnings, 
 the progress, and the attainment of that direct co-opera- 
 tion that relates to the material welfare of society as a 
 whole. 
 
 Many pioneers have heretofore gone forth, many 
 huts have been built, many small clearings have been 
 made ; some are widening ; many are deserted ; some 
 have been re-occupied ; but the great forest of selfish, 
 grinding competition still remains unbroken. 
 
 Our political institutions, joined to the growing 
 intelligence of the masses of our people, present oppor- 
 tunities and advantages for beginnings here and there 
 in direct co-operation in matters relating to material 
 welfare never before existing. 
 
 The spread of education and varied knowledge 
 among the masses of men, and our modes of rapid 
 transportation and communication, surpass, not only 
 the ideals, but even the highest flights of the imagina- 
 tion of the centuries prior to our own. 
 
 While many failures are doubtless before us, we be- 
 lieve many grand social achievements are yet possible 
 in the material welfare of men. Much has been al- 
 ready reached by means of co-operation. Yet all that 
 has been accomplished is but the beginning of greater 
 achievements to come. 
 
 The efforts in the special form of co-operation un- 
 der consideration have been more uniformly successful 
 than in any other. The associations formed for the 
 purpose have various names. The most common name 
 is Building and Loan Associations, but different names 
 
8 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 are used in different localities, such as " Building As- 
 sociations," " Mutual Savings and Loan Associations," 
 " Homestead Aid Associations," " Co-operative Banks," 
 etc. We prefer to class them under the name of " Co- 
 operative Savings and Loan Associations." This, to 
 our mind, describes them more accurately than any 
 other name by which they have been called. 
 
CHAPTER II. 
 
 SOME OF THE BENEFITS OF CO-OPERATIVE SAVINGS 
 AND LOAN ASSOCIATIONS. 
 
 IN every business center of our land, whether a 
 city or a village, there is a large class of the population 
 that work for wages. Some are artisans, some are 
 clerks. Their thrift and prosperity must always de- 
 pend upon the amount they save. 
 
 It is not the amount of wages that the wage- worker 
 earns and receives that makes him prosperous and 
 ultimately independent, but the amount that he saves 
 from his wages. 
 
 Habits of saving can be cultivated as well as habits 
 of spending. With every person the temptations to 
 spend money are manifold. The devices by which he 
 is induced to part with his money are numerous and 
 ingenious from a church lottery to the dice in a beer 
 saloon. Then the urgency of appetite and the allure- 
 ments of social enjoyment, even when innocent and 
 harmful, are seductive influences that lead to the 
 parting with money in the face of resolutions to save it. 
 
 To encourage savings, it is important that there 
 
 should be abundant opportunities for laying them by 
 
 where they will be safe, and at the same time beyond 
 
 immediate reach for the gratification of passing de- 
 
 2 
 
10 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 sires. To secure this opportunity, there should be 
 in every town savings institutions of some kind, where 
 the wage- worker can deposit his savings at frequent 
 intervals, and allow them to accumulate, and where 
 interest or profits upon the accumulation shall be add- 
 ed to them from time to time. 
 
 The wage-earner will be more liable to withstand 
 the temptation to spend his money if he has under- 
 taken to save a definite sum each week or month, and 
 deposit it at a given time, than he will if the amount 
 and the time of depositing are left uncertain. Having 
 undertaken by an agreement to save a fixed sum 
 monthly or weekly, and deposit it at a certain time in 
 the month or week, he will have a definite purpose in 
 view, and will plan to carry it out. An act of this 
 kind by one artisan or clerk tends to stimulate his as- 
 sociates to do the same, and the example of each will 
 stimulate others in the good work. 
 
 Any one who steadily follows a course of saving 
 forms a habit of great importance to his future career. 
 A man with a definite object before him, and to secure 
 which he is laboring, if it be a worthy one, will be a 
 better man, and more successful in his undertakings, 
 than if without a specific aim of the kind. He labors 
 best who labors to attain some result beyond the wages 
 he receives. If the clerk has made a firm resolve to 
 save and accumulate his savings until they shall amount 
 to one thousand dollars, he will be a better clerk by 
 virtue of this resolution. His task will grow easy as 
 he pursues his aim, the first hundred dollars saved 
 being the hardest to secure. 
 
 All persons concerned in savings will take greater 
 interest in their mutual endeavors if the savings insti- 
 
SOME OF THE BENEFITS. H 
 
 tution in which they deposit is of their own forming 
 and under their own management, provided, of course, 
 that the system upon which it is organized and con- 
 ducted insures the safety of their savings, and secures 
 a satisfactory rate of interest or profits. 
 
 Among the many worthy objects which the wage- 
 worker, whether artisan or clerk, may seek to attain 
 pertaining to his material welfare, none will exceed in 
 beneficial results the determination to own a home. 
 A home of his own does much for the one who labors 
 with brain or muscle. " Home, sweet home," even in 
 song and melody, has softened many hearts and moist- 
 ened many eyes. As an object in view for which to 
 labor, it has warded off many shafts of temptation, 
 lightened the fatigue of toil, and filled many of the 
 hours of rest with pleasant day-dreams. A man who 
 has earned, saved, and paid for a home will be a better 
 man, a better artisan or clerk, a better husband and 
 father, and a better citizen of the republic. 
 
 Every influence that encourages and stimulates 
 home-building and home-owning works good to the 
 individual and to society. In home-building, as in 
 savings, the endeavor of one in that direction stimu- 
 lates his friends and his neighbors. When several are 
 working together, they become a center from which 
 an influence radiates throughout the community. 
 Whenever an individual has set a home, neat, comfort- 
 able, and paid for, before him as an object to strive 
 for, and has steadily pursued his resolve to save his 
 earnings that he may attain his purpose, he is well 
 started toward success and material prosperity, accord- 
 ing to the measure of his abilities. The greater the 
 number of such persons in a society the greater will be 
 
12 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 its prosperity and the higher the tone of its morals. 
 In the hands of citizens such as these the destinies of 
 the republic will be safe. 
 
 The greater number of those who commence life 
 without the aid of a patrimony do not fully appreciate 
 the influence and importance of owning a home until 
 they have married and are at the head of a family. 
 Their home is a rented house, or rooms in a tenement. 
 Rent-day comes as certain as the seasons. It does not 
 stop when the mill or manufactory shuts down; it 
 takes no account of sickness and doctors' bills, baby 
 outfits or nurses ; it does not adapt its exactions to the 
 varying prices of meat or flour. If not paid the no- 
 tice comes, " move out " ; and if the tenant does not 
 move or pay, the sheriff comes quickly to compel it. 
 
 There is no pride in caring for, improving, or beau- 
 tifying a rented house shall I say home ? No, it is 
 not a home ; it is but a stopping-place, a structure to 
 ward off the winds and the storms. No tendrils of 
 heart affection cling to it. It is all the same to the 
 tenant if he move to another house the next month, 
 except for the expense. 
 
 How often such a family wish for a home of their 
 own ! But its attainment seems so impossible that no 
 endeavor to secure it is aroused. There are many of 
 these that would make the endeavor if a feasible way 
 were pointed out. If by some means the sum they pay 
 in rent could be applied in payment for a home, they 
 would gladly avail themselves of the opportunity. 
 
 If, instead of making large payments, they could 
 pay in monthly payments, and at the same time not 
 pay more for the home than its fair value, the advan- 
 tage would be greater, and increase the chances of ulti- 
 
SOME OF THE BENEFITS. 13 
 
 mate success. All members of the family could unite 
 in the good undertaking, and new hope and incentive 
 to labor would lighten present toil, and make more 
 easy self-denying frugality. 
 
 Just these advantages and opportunities for secur- 
 ing a home the institution for savings in every busi- 
 ness center should afford. It may be asked : How can 
 it give such opportunity if conducted upon business 
 principles such as will make it a safe place for sav- 
 ings ? Let us explain. The safest loan for a savings 
 institution is a first mortgage upon real estate, pro- 
 vided the amount loaned does not exceed a certain 
 percentage of the fair market price of the real estate 
 loaned upon. What that percentage should be, to 
 insure safety, depends upon several conditions, viz. : 
 
 1. Whether the real estate is principally land, or its 
 principal value arises from the buildings upon it. 
 
 2. Whether, at the time of the loan, the land has an 
 inflated or speculative market value, or is depressed in 
 its fair value by business stagnation. 3. The manner 
 in which the loan is to be repaid, which will have 
 great influence in modifying the percentage of loan as 
 related to its market value. If the time of payment 
 is deferred for a long term of years, the percentage of 
 the loan upon the market value must be much less 
 than when the borrower commences to repay the loan 
 the next month after it is made, and continues from 
 month to month to make such payments until it is 
 wholly repaid, or, what is the equivalent of such direct 
 payment, he pays into the savings institution each 
 month, in addition to monthly interest, a sum which 
 the institution holds as a security for the payment 
 of the loan in addition to the mortgage. Under these 
 
 0* THE ^ 
 
14- CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 conditions, a loan made upon real estate that is safe 
 at the time of the loan a loan such as could be real- 
 ized by an immediate foreclosure is likely to remain 
 safe by reason of the increased security given from 
 month to month. 
 
 How shall the one who desires to pay for his home 
 become a safe borrower ? Let us assume that seventy- 
 five per cent of the cash market value would be a safe 
 investment for the savings institution at the time of 
 making the loan, in cases where it was to be paid in 
 monthly payments, and interest payable monthly. If 
 the borrower has, to commence with, a margin of 
 twenty-five per cent on the value of the home he de- 
 sires to purchase, he can buy at once, pay the margin, 
 and borrow the seventy-five per cent from the savings 
 institution, mortgage to them, and make his monthly 
 payment until all is paid for. 
 
 If he has not the margin of twenty-five per cent to 
 commence with, then he must commence to save his 
 earnings, and deposit them monthly or weekly until 
 the deposits so made, with the addition of the interest 
 or profits upon them, amount to the original margin ; 
 then he can buy, make his mortgage to the association, 
 and proceed to pay for his home in monthly payments 
 these monthly payments not much exceeding in 
 amount the sum he was paying for rent. In a few 
 years the home will be paid for, free of all incum- 
 brance. 
 
 Another advantage is offered by the co-operative 
 savings and loan associations : It frequently happens 
 that a member may want to borrow a sum for which 
 he has no real estate to offer as security. He has 
 shares in the association upon which he has been 
 
SOME OF THE BENEFITS. 15 
 
 paying promptly for many months. He lias friends 
 who are willing to indorse for him, but their indorse- 
 ments might not be thought good at the bank or with 
 the money leaner. Moreover, he wants the loan on a 
 basis that will enable him to repay in monthly install- 
 ments. His friend or friends also hold shares in the 
 association, and have no present use for the money 
 accumulated in the association upon their shares. 
 They are using it simply as a savings institution. 
 They have confidence in their friend who wants to 
 borrow, and are willing to pledge their shares to the 
 association as a collateral security for the repayment 
 of the loan. They can do so, if the amount paid in 
 upon all the shares thus pledged exceeds the amount 
 of the loan. This makes the association absolutely 
 secure, and places the borrower in the best condition 
 possible for repaying his loan. 
 
 We have endeavored in this chapter to outline 
 some of the benefits resulting from co-operative sav- 
 ings and loan associations. We have studiously avoid- 
 ed portraying them in vivid colors. Many benefits 
 will accrue from them that we have not mentioned. 
 Many other co-operations, through their instrumental- 
 ity, will be made. The members will become trained 
 in business habits and methods; accumulations will 
 be made, which may be joined together in business 
 co-operations. Not least among their manifold bene- 
 fits is the stimulus they will give to endeavors of tem- 
 perance, industry, and frugality. 
 
CHAPTER III. 
 
 TYPICAL "CO-OPERATIVE SAVINGS AND LOAN ASSO- 
 CIATIONS." 
 
 THE purpose of the present chapter is to give a 
 general outline of the scheme upon which co-operative 
 savings and loan associations are conducted. There 
 are so many modifications of the general scheme that an 
 attempt to refer to them all would confuse the reader. 
 A particular class has therefore been selected, a class 
 that is typical, and involves the fundamental princi- 
 ples of all. In a subsequent chapter we shall point out 
 the important divergencies from this typical form. 
 
 The Legislature of the State of New York, in 1887, 
 passed an act entitled " An act providing for the for- 
 mation of co-operative savings and loan associations." 
 It is known as Chapter 556 of the Session Laws of 
 1887. We shall select the scheme which this act em- 
 bodies for our general outline. We do so because we 
 believe it embodies the true principles upon which 
 this form of co-operation should be conducted. 
 
 Co-operative savings and loan associations are cor- 
 porations. Every member of an association is a stock- 
 holder, and holds a certificate of stock, stating the 
 number of shares owned by him. 
 
 In an ordinary business corporation the stockholder 
 
TYPICAL ASSOCIATIONS. 17 
 
 buys his stock and pays its fall value at the beginning 
 of his membership, making no further payment upon 
 it while he owns it. He buys it as an investment, and 
 his profits from the investment come in the form of 
 dividends from time to time. If the business of the 
 corporation is successful, and gives promise of large 
 and steady dividends in the future, the value of the 
 shares advance ; and the reverse will occur if no divi- 
 dends are paid, and the outlook for the success of the 
 enterprise in the future is foreboding. 
 
 In the co-operative savings and loan association 
 the stockholder pays only one dollar when he buys a 
 share of stock, except under circumstances hereafter 
 explained, and then continues to pay one dollar each 
 month upon it to the association, until the small sums 
 thus paid, increased by the dividends added to them 
 by the association, amount to the sum of two hundred 
 dollars. When this amount is reached the stockholder 
 surrenders his share of stock and the association pays 
 him two hundred dollars in one sum. 
 
 The one dollar which is paid in each month is called 
 dues, and when the share has reached the value of two 
 hundred dollars it is called a matured share. It rep- 
 resents two hundred dollars of accumulated savings. 
 Thus it appears clearly that the capital of the associa- 
 tion consists of the accumulated savings of its mem- 
 bers, paid to the association upon shares of stock, and 
 increased by interest which the association has re- 
 ceived from loans made by it from the savings of its 
 members thus paid to the association, and from other 
 minor sources of income. It follows that the amount 
 of the capital of the association will vary from month 
 to month and year to year. 
 
18 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 The stock of the association is issued in series. 
 The first stock issued is series No. 1 ; the next, series 
 No. 2, and so on during the life of the association. It 
 is usual to issue a new series at the beginning of each 
 fiscal year. All stock issued during the fiscal year will 
 belong to that series. After a new series is issued no 
 stock will be issued in a prior series. 
 
 All persons taking shares of stock at the first 
 monthly meeting in the year will pay at the time of 
 getting their shares one dollar dues on each share. 
 Persons taking shares at the second monthly meeting 
 will pay two months' dues. If obtained at the fourth 
 monthly meeting, four dollars dues will have to be paid. 
 Stocks taken out after the sixth monthly meeting, in 
 addition to paying dues to the same amount they 
 would have paid if they had taken the stock at the 
 first monthly meeting, are charged a certain amount 
 of interest, the amount of interest being usually the 
 same as that which the association pays to a share- 
 holder who withdraws from the association after he 
 has made six months' payment of dues and before the 
 end of the fiscal year. 
 
 The reason for charging dues upon all stock issued 
 during the fiscal year, the same as the shareholder pays 
 if he takes his stock at the first meeting in the year, is 
 to make the amount of dues paid to the association 
 upon each share issued in each series and outstanding 
 at the close of the fiscal year, precisely the same, so 
 that all shareholders in the series are entitled to 
 the same amount of dividend in the distribution of 
 profits. 
 
 A distribution of profits and losses should be made 
 before the issuing of a new series. Some associations 
 
TYPICAL ASSOCIATIONS. 19 
 
 issue semi-yearly series, and even quarterly series. To 
 do so simply requires the distribution of profits and 
 losses to be made before the issuing of a new series. 
 
 We have now described the system as to a share- 
 holder who continues to pay his dues until his share 
 of stock has reached the value of two hundred dollars, 
 when his accumulated savings are paid to him and he 
 surrenders his stock. But suppose that at any time 
 before such matured value is reached the shareholder 
 finds himself unable to continue the payment of his 
 dues, or he wishes to use the money he has already ac- 
 cumulated, or for any other cause desires to withdraw 
 from the association ! What then ? 
 
 Every share of stock outstanding has upon the 
 books of the association a holding value and a with- 
 drawal value. The holding value is made up of all 
 the dues that have been paid in, plus all the profits 
 that have been added in the distribution of profits. 
 The withdrawal value is the sum which the association 
 will pay to the shareholders who withdraw before their 
 stock has reached its matured value. 
 
 It is not customary to allow the withdrawing share- 
 holder all the profits which have been added to his stock 
 in determining its holding value. Some portion of them 
 is usually retained by the association. When no part 
 is retained, the holding and the withdrawal value will 
 be the same. Each association determines for itself 
 what portion, if any, of the profits it will retain from 
 the withdrawing shareholder. The share of the profits 
 retained, deducted from the holding value, will give 
 the withdrawal value. In some associations the by- 
 laws prescribe a certain definite percentage of the 
 profits to be retained ; in other associations the board 
 
20 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 of directors are empowered by the by-laws to determine 
 from time to time what this percentage shall be. 
 
 In some associations the withdrawal value of each 
 share of stock is determined at each distribution of 
 profits, that is, at the same time the holding value is 
 declared. The withdrawal value thus declared will 
 continue until the next distribution of profits. Shares 
 withdrawn at any time after such declaration of their 
 withdrawal value and before the next distribution of 
 profits will have added to such declared withdrawal 
 value any dues paid and a certain rate of interest on 
 such dues and on the withdrawal value as declared 
 down to the time of their withdrawal. This rate of 
 interest should be fixed by the by-laws. 
 
 All associations require at least thirty days' notice 
 of a desire to withdraw, before the association becomes 
 liable to pay. Only a certain portion of the receipts 
 of the association are applicable to paying off with- 
 drawing shareholders without the consent of the di- 
 rectors. In associations that have no matured shares 
 calling for payment, one half of the receipts are ap- 
 plicable to the payment of withdrawals ; and only one 
 third, when they have matured shares awaiting pay- 
 ment. 
 
 When the demands of withdrawing shareholders 
 exceed the funds applicable to their payment, they are 
 paid in the order in which their notices of withdrawal 
 were filed with the secretary of the association. 
 
 Only one third of the receipts are applicable to the 
 payment of matured shares without the consent of the 
 directors; and when the funds are not sufficient to 
 pay all matured shares at once, the directors deter- 
 mine in what order they shall be paid ; and, from 
 
TYPICAL ASSOCIATIONS. 21 
 
 the time they reach their matured value until paid, 
 they draw a certain rate of interest, determined by the 
 by-laws. The object of thus apportioning the receipts 
 is always to have a certain part of them to satisfy the 
 wants of shareholders desiring to borrow. 
 
 Shares of stock which have not been pledged to 
 the association for a loan are called unpledged, or 
 " free " shares. Shares that have been pledged to the 
 association are called " pledged," or " borrowed " 
 shares. 
 
 For the purpose of preventing a few heavy share- 
 holders from obtaining and holding control of the 
 association, the number of free shares which any one 
 shareholder can hold is limited to ten in any one series, 
 and the number of borrowed shares to twenty. 
 
 It is customary to charge what is known as an en- 
 trance fee, not exceeding twenty-five cents on each 
 share of stock issued. Its object is to aid in defraying 
 expenses. 
 
 All shareholders sign the by-laws upon taking 
 shares of stock. They may sell their shares of stock, 
 if unpledged, to any person, and upon such transfer 
 being made upon the books of the association, and the 
 transferee signing the by-laws, he will become a share- 
 holder in the association. A transfer fee not exceed- 
 ing twenty-five cents a share is usually charged by the 
 association. 
 
 All dues upon stocks are paid to the association at 
 a regular stated time in each month. A committee of 
 the board of directors receive these dues, and receipt 
 for them in a pass-book which is issued to each share- 
 holder. When the hour has passed for receiving dues, 
 they pass the receipts of the evening over to the treas- 
 
22 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 urer of the association, and take his receipt therefor. 
 All interest upon loans made by the association is paid 
 in monthly installments, and paid at the same time 
 with the dues ; in short, all the receipts of the associa- 
 tions come in at the stated meetings each month. No 
 officer has the right to receive funds for the associa- 
 tion except at the stated meetings, except that the 
 treasurer may receive payment of loans at any time ; 
 but, when not paid at such a meeting, interest has to 
 be paid upon the loan until the next stated meeting. 
 
 For the purpose of securing prompt payment of 
 dues and interest, the association imposes a fine, not ex- 
 ceeding ten per cent of the amount of dues or interest 
 defaulted. The amount of the fine is fixed by the by- 
 laws. 
 
 The funds of the association are loaned only to its 
 shareholders. The loans are usually made in sums of 
 two hundred dollars, the value of a matured share, or 
 a multiple thereof. Some associations, however, make 
 the minimum limit of a loan fifty dollars, or one 
 fourth of the matured value of a share ; and the next 
 grade in amount one hundred dollars, or one half a 
 share. 
 
 Every shareholder has the right to become a bor- 
 rower, upon giving the required security, to an amount 
 equal to the matured value of the shares owned by 
 him. Thus, if he owns ten shares, he may become a 
 borrower to the extent of two thousand dollars. 
 
 While all shareholders have the right to become 
 borrowers, all will not want to borrow at the same 
 time ; but it will often occur that there will not be 
 sufficient money to meet the wants of all who do wish 
 to borrow. As all who have adequate security to offer 
 
TYPICAL ASSOCIATIONS. 23 
 
 stand on equal ground, it becomes an important ques- 
 tion, relating to the harmonious workings of the asso- 
 ciation, to determine in what manner the first right to 
 a loan from the funds of the association shall be de- 
 cided. The common, and we believe the most equita- 
 ble and satisfactory mode is to decide it by an open 
 bidding of a premium the one bidding the highest 
 premium to have the money ; in short, awarding the 
 loan or loans to the highest bidder or bidders. 
 
 Upon the subject of the kind of premium bid and 
 how paid, there is great divergence in the " building 
 associations," " co-operative banks," " mutual loan 
 associations," etc. We can not stay to explain them 
 at this time it would confuse rather than otherwise. 
 We will describe the scheme at this time of the co- 
 operative savings and loan associations of New York. 
 It already appears that the value of a matured share, 
 two hundred dollars, is the unit in all loans. If the 
 loan is less than two hundred dollars, it is a definite 
 fractional part, one fourth or one half of that sum. 
 So that the language of the borrower, when stating 
 how much money he wants to borrow, describes it by 
 naming " one share," if he wants to borrow two hun- 
 dred dollars ; " five shares " if he wants to borrow one 
 thousand dollars; "one quarter of a share" if he 
 wants to borrow fifty dollars, etc. This is simple, 
 when the premium bid is so much a share ; it is read- 
 ily understood and the amount is easily computed by 
 all interested. Thus, if there are two thousand dollars 
 to loan and two or more shareholders want it, the proper 
 officer offers the money for sale : A bids " fifty cents," 
 B "seventy-five cents"; A raises his bid to "one 
 dollar " ; if no one bids above him, the money is struck 
 
24 CO-OPERATIVE SAYINGS AND LOAN ASSOCIATIONS. 
 
 off to him. The premium he has agreed to pay for 
 the loan is one dollar per share. If the number of 
 shares he is borrowing is ten, the total premium is ten 
 dollars, and the total amount of money he will receive 
 will be two thousand dollars, less the premium. Al- 
 though he receives but nineteen hundred and ninety 
 dollars, he will give a security for two thousand, and 
 pay interest on that sum. The " premium per share " 
 retained passes to the profit-and-loss account of the 
 association. 
 
 When there is no competition for the money the 
 borrower will simply bid " par," and no one raising his 
 bid, he will be awarded the money, and will receive 
 the full sum of two hundred dollars per share. Under 
 this system the only purpose of bidding a premium is 
 to decide who shall have the money when several de- 
 sire it. The securities received by the association, in 
 fact, call for the payment of the principal sum named 
 therein, and interest upon the same ; and the whole 
 subject of premium is closed when the loan is perfected. 
 We shall explain the other systems of premiums in a 
 subsequent chapter. 
 
 Immediately following the receipt of dues and 
 interest at each stated monthly meeting, all the funds 
 of the association that can be loaned at that meeting 
 are offered to borrowers, and bids therefor invited. 
 The person or persons to whom a loan or loans are 
 awarded at once submits a statement of the securities 
 proposed. At once following the sale of money to 
 borrowers, the directors hold their regular monthly 
 meeting for the transaction of the business of the 
 association. The directors have power to pass upon 
 the securities at their meeting, but the usual course 
 
TYPICAL ASSOCIATIONS. 25 
 
 is to refer them to the finance committee. This mode 
 is always pursued in reference to real-estate security. 
 
 The form and kind of securities required by the 
 associations are as follows : 
 
 1. In all cases a bond conditioned upon the pay- 
 ment of the loan and the interest thereon,. according 
 to the provisions of the scheme of the association. 
 
 2. In all cases also the assignment to the associa- 
 tion of the shares of stock borrowed upon, as collateral 
 security for the payment of the loan. 
 
 3. A first mortgage upon unincumbered real estate, 
 containing the same conditions as the bond and col- 
 lateral thereto. 
 
 4. Or in lieu of the mortgage, other shares of stock 
 of the association may be pledged, provided their with- 
 drawal value, added to the withdrawal value of the 
 shares borrowed upon, shall exceed the amount of the 
 loan, and interest thereon, for six months. This gives 
 absolute security the association having the money 
 with which to make good the loan in case of default 
 by the borrower. 
 
 A loan secured by a pledge of shares is known as a 
 stock loan ; and when secured by a mortgage on real 
 estate, as a mortgage loan. 
 
 In associations where the premium bid is per share, 
 as before described, the rate of interest charged is six 
 per cent per annum, payable in monthly installments. 
 The interest on a share for one month is one dollar. 
 
 To illustrate the simplicity of this scheme, suppose 
 A to be the owner of five shares, upon which he is 
 paying his monthly dues, amounting to five dollars. 
 He becomes a borrower to the extent of one thousand 
 dollars, securing the same by pledging his five shares, 
 8 
 
28 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 and a mortgage upon real estate. The interest upon 
 each share of his loan two hundred dollars is one 
 dollar a month, or five dollars on the five shares ; his 
 dues are five dollars, making his monthly payment 
 to the association ten dollars. If he continue paying 
 five dollars dues on his stock, and five dollars interest 
 on his loan until his stock has reached its matured 
 value the sum of one thousand dollars the value of 
 his stock becomes the equivalent of his loan, and they 
 balance each other. He surrenders his stock, and the 
 association cancels his securities. 
 
 The safety to the association of the security of a 
 loan, constantly increases from the next meeting after 
 the loan is made, by the increasing value of the shares 
 borrowed upon, from the payment of dues thereon. 
 But the borrower is not obliged to retain his loan until 
 his shares of stock reach their matured value. He 
 may repay his loan in full at any time, or one share 
 thereof. If he so pays, except at a stated monthly 
 meeting, he must pay interest up to the next meeting. 
 When he has paid his loan in full, his shares will be 
 released from the pledge for the loan, and he will hold 
 them again as unpledged or free shares. 
 
 But instead of paying his loan in full, and still re- 
 taining his shares of stock, he may wish to have their 
 value applied in part payment of the loan. In that 
 event he will apply at a stated monthly meeting, and 
 give proper notice of his desire to pay his loan and 
 have the shares borrowed upon applied in part pay- 
 ment. Their withdrawal value will be allowed to him 
 upon his paying the balance of the loan, and his shares 
 of stock will be canceled, and the association will sur- 
 render his bond and give a discharge of the mortgage. 
 
TYPICAL ASSOCIATIONS. 27 
 
 But suppose a borrower from any cause does not 
 keep up the payment of his dues and interest. What 
 then? When he becomes six months in arrears for 
 interest and dues or either, the whole loan becomes 
 due at once, at the option of the directors, and the 
 association may commence an action to foreclose upon 
 the securities. In this action the withdrawal value 
 of the shares borrowed upon, at the time of commenc- 
 ing the action, will be applied upon the debt, and the 
 stock canceled, and the decree taken for the balance. 
 The usual and ordinary procedure of the courts in such 
 cases controls the case thereafter. 
 
 The associations may become purchasers at a pub- 
 lic or private sale of any real estate upon which they 
 have a lien, or in which they have any interest, and 
 thereafter to hold, lease, mortgage, or sell the same, as 
 any individual might do. If for any cause at a sale of 
 the mortgaged premises in the foreclosure action a 
 sufficient sum is not bid for the premises to satisfy the 
 costs and mortgage claim, a judgment for any de- 
 ficiency may be taken against the borrower upon his 
 bond. 
 
 We now come to the subject of the distribution of 
 profits. 
 
 The gross profits of the association will consist of 
 interest, premiums, share of profits left by withdraw- 
 ing shareholders, fines, transfer and entrance fees. 
 The principal item, of course, will be interest. 
 
 Under the system we are outlining premiums will 
 not usually amount to a large sum. It is not desirable 
 that they should, because large premiums mean that 
 the borrower will, in effect, pay large interest; and, 
 when he does so, it works injustice as between the bor- 
 
28 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 rower and the holder of free shares, by giving to the 
 latter large profits at the expense of the former. Of 
 this we shall speak more at length hereafter. Dues 
 paid can not, of course, be reckoned as profits ; they 
 are capital. 
 
 For the purpose of illustration, we will first describe 
 the distribution of profits, at the close of the first fiscal 
 year, in an association which issues a yearly series only. 
 The expenses of conducting the business should always 
 be paid in full up to the time when the distribution is 
 made. We will assume the association has issued dur- 
 ing the year eleven hundred shares of stock ; that 
 some of these have been withdrawn, so that at the end 
 of the fiscal year only one thousand shares are out- 
 standing. Upon each of these shares there has been 
 paid during the year twelve dollars in dues, making 
 the total upon all the shares twelve thousand dollars. 
 It may prove that the dues are in arrears on some 
 shares ; if so, the amount so in arrears, and fines there- 
 on, should be treated as an asset, because it is a sum 
 due the association, and will be paid. The assets of the 
 association will consist of loans, for which it holds se- 
 curities, cash on hand, dues, interest in arrears, and fines 
 accrued thereon. The sum of these will constitute the 
 assets on hand ; but, to be absolutely accurate and just 
 in the distribution, there is another item that should 
 be included in the assets for the purpose of the dis- 
 tribution of profits, namely, the interest on the loans 
 for the last month of the fiscal year, which will not be 
 paid until the first meeting of the new fiscal year 
 that is, the fiscal year for convenience should com- 
 mence with the first meeting in the year and will end 
 at the beginning of the first meeting in the next fiscal 
 
TYPICAL ASSOCIATIONS. 29 
 
 year. The interest paid at the first meeting of the 
 next fiscal year accrued during the last month of the 
 old fiscal year, and should be counted among the assets 
 of that year in ascertaining the exact profits of the 
 year. Adding the interest upon the loans to be paid 
 at the next meeting to the assets above named, we have 
 the total assets for the purpose of distribution. De- 
 duct the twelve thousand dollars liability for dues 
 paid, which constitutes in fact the capital of the asso- 
 ciation, and the remainder will show the net profits of 
 the year's business. Now, if we divide this net profit 
 by the number of shares outstanding, viz., one thou- 
 sand, the quotient will be the sum that should be 
 added to each share as a dividend in the distribution 
 of profits. 
 
 This is a simple method, but another method may 
 be pursued, viz., dividing the net profits by the total 
 amount of the capital namely, the twelve thousand 
 dollars and the quotient will then be the percentage 
 to be added to each dollar of the capital as a dividend. 
 In case of an association having several series out- 
 standing at the time of the distribution, this method 
 must be followed. When the dividend has been added 
 to the twelve dollars of dues paid during the year, 
 their sum constitutes the " holding value " of each 
 share of stock at the beginning of the next fiscal year, 
 and the sum of such " holding value " of all the shares 
 will constitute the capital of the association at the be- 
 ginning of the next year. In this distribution we have 
 assumed that there were no liabilities except the capi- 
 tal stock. If the association owes borrowed money, 
 the amount would be treated as a liability in making 
 the statement to find the net profits for distribution. 
 
30 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 "We will next illustrate the distribution of profits in 
 an association issuing a yearly series at the end of its 
 third fiscal year. The association will have outstand- 
 ing three series of stock. The holding value of each 
 share of the first and second series was determined at 
 the last distribution of profits, and if we take the hold- 
 ing value of one share in the first series and multiply 
 it by the total number of shares outstanding in that 
 series at the end of the third fiscal year, we have the 
 total holding value of the first series. Performing a 
 like operation in reference to the outstanding shares 
 in the second series, we ascertain the total holding 
 value of that series at the beginning of the year. By 
 adding together these two results, we have the total 
 holding value of the first and second series, which con- 
 stituted the total capital of the association at the begin- 
 ning of the third fiscal year, and upon which monthly 
 interest has been received during the year. 
 
 Upon each of these shares outstanding at the close of 
 the third year there has been paid twelve dollars of dues. 
 There have also been paid twelve dollars of dues on each 
 share outstanding in the third series of stock. These 
 dues are not only a liability, but they have been added 
 to the capital, and are entitled to share in the profits, 
 and we must treat them in this double aspect. The 
 treatment of them as a liability in making up the state- 
 ment of liabilities and assets is simple. By multiply- 
 ing the total number of shares outstanding in all three 
 series by twelve, we have their sum total as a liability. 
 We also have it as capital. By adding their sum total to 
 the total holding- value of the first and second series as 
 above found, we have the total liability of the associa- 
 tion on account of capital. If there are any other 
 
TYPICAL ASSOCIATIONS. 31 
 
 liabilities of any kind, they should still be added to 
 this total for the purpose of making the statement of 
 liabilities and assets. Having ascertained the total 
 liabilities, the next step is to ascertain the total assets. 
 These will usually consist of securities for loans, dues, 
 interest, fines unpaid, and cash on hand. As ex- 
 plained in our illustration of distribution when there 
 was but one series of stock to share in the dividend, 
 we must include in the statement of assets, to be 
 wholly accurate, the interest which becomes due and 
 payable at the first meeting in the next year. This 
 will be, of course, in the scheme we are outlining in 
 this chapter, as many dollars as there are shares bor- 
 rowed upon. In addition to these items, we should 
 include in our assets the fair cash value of any real es- 
 tate or other property that the association may chance 
 to own. Having ascertained the total assets, we de- 
 duct therefrom the total liabilities, and the remainder 
 is the net sum of the profits for the year to be declared 
 as a dividend upon the capital. 
 
 It is apparent that each dollar of the capital repre- 
 sented by the first and second series of stock is entitled 
 to the same dividend. It has been invested the whole 
 year. That part of the capital made up of the dues 
 paid during the year has not been invested during the 
 whole year. It has been paid from month to month 
 during the year, and invested from the time, as it was 
 received. "We must find what sum invested for a year 
 would be their equivalent. That the illustration may 
 be simple and clear, we will first take the dues paid 
 upon a single share, viz., twelve dollars. The first 
 dollar paid at the beginning of the year has been in- 
 vested twelve months ; the next dollar eleven months ; 
 
32 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the next, ten months; and so on to the twelfth dollar, 
 which has been invested one month. Now 12 + 11 + 
 10 + 9 + 8 + 7+6 + 54-4 + 3 + 2 + 1 = 78. Thus 
 we find that the twelve dollars received and invested 
 during the year in monthly installments, each install- 
 ment being paid and invested at the beginning of each 
 month, is equivalent to one dollar invested for seventy- 
 eight months; and one dollar invested for seventy- 
 eight months is equivalent to $6.50 invested for one 
 year. Multiplying the total number of shares out- 
 standing in all the series by $6.50, we have a sum 
 which, if invested for the whole year, would produce 
 the same income that the total dues will produce when 
 received in monthly installments, and invested from 
 month to month. By adding this equated sum, ob- 
 tained as above described, to the total value of the first 
 and second series, we have the total sum by which to 
 divide the net profits, and the quotient will be the 
 dividend percentage to be made upon each dollar of 
 the capital invested during the whole year. 
 
 Taking now the " holding value " of a share in the 
 first series at the beginning of the year, and multiply 
 by the dividend percentage on one dollar, and we have 
 the total dividend to be made on said share, except 
 the dividend on account of dues paid during the year. 
 To find this, we will multiply $6.50 (the reason of 
 which was above explained) by the dividend percent- 
 age, and the result will give us the dividend to be 
 made on account of the dues paid in during the year. 
 Adding together the holding value at the beginning of 
 the year, the dividend made thereon, the dividend on 
 the dues paid during the year, and the dues themselves, 
 and we shall have the holding value, which is also the 
 
TYPICAL ASSOCIATIONS. 33 
 
 capital value, of the share at the beginning of the 
 fourth fiscal year. Multiplying this value of one share 
 by the number of shares in the first series, and we have 
 the total holding value of the first series after the divi- 
 dend has been added. 
 
 Next taking a share of the second series, and per- 
 forming in reference thereto the same operations above 
 given in reference to the share in the first series, and 
 we shall obtain the same result in reference to the sec- 
 ond series. 
 
 In reference to the third series, we simply multiply 
 $6.50 by the dividend percentage, and add the result 
 to the $12 of dues, and their sum constitutes the hold- 
 ing value of a share in the third series of stock at the 
 beginning of the fourth fiscal year. Multiplying by 
 the total number of shares in the third series, we have 
 the total value of this series. Now, adding together 
 the totals of the three series, we shall have a sum equal 
 to the sum of the total assets with which we started, 
 if our computations have been correct. If they bal- 
 ance, it proves the correctness of the computations. If 
 they do not balance, it demonstrates that we have com- 
 mitted errors, and must find them. 
 
 The procedure here outlined is applicable to a dis- 
 tribution of profits in an association having any num- 
 ber of series outstanding. The same operations are to 
 be performed with reference to each series, except the 
 last series, which have been described with reference 
 to the first and second series of stock in the foregoing 
 discussion ; and the operations with reference to dues 
 paid during the year upon all series will be the same 
 as above described, and they will be the same with 
 reference to the last series. The same operations will 
 
34: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 also be pursued in case of a half-yearly or quarterly 
 series scheme in the distribution of profits before the 
 issuing of a new series. The only variation will be in 
 equating the monthly payments. The equation will 
 have to be made for the shorter term instead of for 
 one year. 
 
 In ascertaining the dividend percentage, if there is 
 a small fraction it is often advisable not to use it, but 
 carry over as an undivided profit the sum to which it 
 would amount. In the foregoing illustrations we 
 have assumed a distribution of all the net profits. 
 Some associations, and we deem it a wise course to 
 pursue, deduct from the net profits a small percentage 
 before making the distribution and carry it over as 
 undivided profits, gradually increasing the amount thus 
 carried over as undivided profits from year to year, and 
 thereby making what may be properly called a " guar- 
 antee fund " ; and if any losses are sustained during 
 the year, charge them up against this fund, thus dis- 
 tributing the effect of any loss that may occur in such 
 a manner as not to impair seriously the steady distribu- 
 tion of a fair dividend at the close of each fiscal year, 
 or before a new series is issued. 
 
 Upon this subject we refer the accountant to the 
 ninth chapter, devoted to the subject of " How to 
 keep Accounts." 
 
 We should allude to the liability of these associa- 
 tions to suffer loss. We know of no business under- 
 taking, co-operative or otherwise, free from all liability 
 of loss. 
 
 It is important to every one interested in the sub- 
 ject of co-operative savings and loan associations that 
 he should understand the liability of loss that attaches 
 
TYPICAL ASSOCIATIONS. 35 
 
 to the scheme in its practical workings. The first 
 liability to loss is one common to every corporation 
 the possibility that the officers who handle the 
 money will prove dishonest and steal the funds. In 
 this the liability in these associations is at the mini- 
 mum. The funds received by the association are re- 
 ceived at the stated meetings by the committee of the 
 directors; one of their number has receipted in the 
 pass-books of the members for all received ; another 
 member has checked the amount off in another book 
 where it was charged against the shareholder at the 
 beginning of the meeting; a third has counted the 
 money as received. Immediately at the close of the 
 receipts, they balance the cash received with the 
 amount checked as paid, and pass the cash over to the 
 treasurer, and take his receipt. The book upon which 
 the amounts paid have been checked is kept by the 
 secretary. The total receipts of the evening are at 
 once reported to the directors at their meeting. Loans, 
 as before stated, may be repaid to the treasurer at any 
 time. At no time will a large sum of money be on 
 hand in the treasurer's custody, as compared with the 
 total assets of the association. A bond is required of 
 him, much larger than any sum that will be in his 
 hands at any one time, with two sureties approved by 
 the directors. We assert there is no business con- 
 cern handling the same amount of money in which 
 the liability for loss is less than in these associations. 
 No moneys can be paid out by the treasurer except 
 upon the order of the directors, which order must be 
 signed by the president and secretary. 
 
 The next liability is the possibility of the securities 
 taken for loans not being good, and the full amount 
 
36 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 of the loan not being realized in the event the bor- 
 rower defaults in paying the loan. This liability is 
 incident to the savings-bank, and to every institution 
 that loans money ; but here again we assert these asso- 
 ciations are safer than any other scheme for savings yet 
 devised. We have before alluded to the fact that all 
 loans made upon a pledge of shares of stock, the with- 
 drawal value of which exceeds the amount of the loan 
 and six months' interest thereon, were perfectly safe. 
 As an association advances in age, the percentage of 
 its loans thus secured will increase. Now as to liability 
 to loss on mortgage loans. The same care as to titles 
 is required as in any corporation loaning money on real- 
 estate security. Whether the value of real estate of- 
 fered is sufficient is determined usually by a duly ap- 
 pointed committee of the directors. Every one of 
 them is personally interested in the safety of the 
 security ; his reputation is also at stake with his fellow 
 shareholders ; he receives no benefits by deciding that 
 the real estate offered is a sufficient security which he 
 would lose by deciding otherwise. He stands in a 
 position to be absolutely unbiased, except that his 
 every interest is in the direction of securing only a 
 good security. His judgment may be at fault, but the 
 committee consists of three men ; they are passing 
 upon the value of real estate in their own town ; they 
 know its market value, its advantages and disadvan- 
 tages. More important than these facts is the one 
 that the payment of the loan, except as to a part, is 
 not long deferred. At the next monthly meeting the 
 borrower begins, in effect, paying his loan ; the shares 
 of stock borrowed upon are increasing in value. If 
 the loan was safe at the time it was passed, the chances 
 
TYPICAL ASSOCIATIONS. 37 
 
 are very small that it will ever become unsafe. If it 
 was an unsafe loan at the time when passed by the 
 committee, it will constantly grow safer so long as the 
 borrower continues the payment of his dues and inter- 
 est. It should have been stated before that these asso- 
 ciations make loans only in their immediate vicinity, 
 so that many shareholders know constantly of all loans 
 made, and all may know who desire. Another fact 
 should not be forgotten in this connection, that the 
 moral risk of a class of men who have planned for 
 themselves a steady course of saving, or the paying for 
 a home by monthly savings, is far above the average 
 moral risk of a mortgage in the usual mode. In the 
 event of the association having to l)id in a parcel of 
 real estate to secure its debt, it has a great advantage 
 in selling it again, by getting a small down payment 
 and the purchaser becoming a shareholder and paying 
 for it in the monthly sums upon dues. 
 
 For the foregoing reasons we believe the scheme of 
 these associations, in their practical workings, is more 
 free from liability of losses than any other scheme in 
 operation. 
 
 The question naturally arises, in case there are no 
 borrowers, what then ? Such a contingency will sel- 
 dom arise, and, if it does occur now and then, it will 
 be temporary in its duration. The worst result from 
 s.uch a contingency is a failure, for the time being, to 
 make profits; the principal sum of dues paid is not 
 impaired. The scheme of the association, however, 
 provides for such a contingency if it arises and con- 
 tinues, and that is by compelling withdrawals in series 
 that have attained a certain age. What share shall be 
 withdrawn is determined by lot, the shareholders thus 
 
38 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 compelled to withdraw being paid the " holding value " 
 of their shares. It is very seldom in the experience of 
 these associations that this remedy has to be used. In 
 the natural course of business, if the association is not 
 making fair profits, shareholders will begin to with- 
 draw at the withdrawal value of their shares, thereby 
 leaving such portion of the profits which have been 
 added to the dues paid as the by-laws of the associa- 
 tion provide. The profits thus retained help to in- 
 crease the profits to be divided at the next distribution 
 among the shares that remain outstanding. 
 
 There can not be anything like a "run upon a 
 bank " upon one of these associations ; it matters not 
 how many want money on withdrawals, each share- 
 holder must wait his turn ; he must give the thirty 
 days' notice of his desire to withdraw, and if there is 
 not sufficient money applicable to the payment of with- 
 drawals to pay all who have given notice, they are 
 paid in the order of the time when their notices of 
 withdrawal were filed with the secretary. The asso- 
 ciation will pay them as rapidly as possible, because 
 the one withdrawing is surrendering some portion of 
 his profits, which accrues to the benefit of the share- 
 holders remaining ; hence, the payment of withdraw- 
 als is always a profitable use of the funds received into 
 the treasury. The nature of the scheme does not ad- 
 mit of that combination of facts which must occur to 
 produce the feeling of uncertainty, doubt, and sus- 
 picion, which breed the panic and sudden rush of de- 
 positors in a bank to obtain their money. 
 
 The management of the association is in the im- 
 mediate control of the board of directors, consisting 
 usually of nine members, with the president, secretary 
 
TYPICAL ASSOCIATIONS. 39 
 
 and treasurer and vice - president as additional ex 
 officio members thereof, making seven members a 
 quorum for the transaction of business. These officers 
 are elected annually. In their election each shareholder 
 has one vote for every share of stock owned by him 
 not in arrears for dues. The president appoints from 
 the nine directors a finance committee of three mem- 
 bers, which serves for four months, thus using upon 
 this committe during the year all the nine members of 
 the board. .The president is also, ex officio, a member 
 of every finance committee, and the secretary of the 
 association acts as its secretary. 
 
 This committee receives and receipts for the mon- 
 eys at the monthly meetings, and passes them over to 
 the treasurer. They pass upon the sufficiency as to 
 the value of all real-estate security offered, and, in 
 conjunction with the attorney of the association, upon 
 the titles of the real estate proposed to be mortgaged 
 to the association; their report is made in writing, 
 and signed by them. As a rule, no compensation is 
 paid to any officer except the treasurer and secretary, 
 and their salaries are not large ; their amount will be 
 governed by the volume of business the association is 
 doing. 
 
 One of the strong elements of success in associa- 
 tions organized and conducted on this scheme is the in- 
 terest which is aroused in all its members to aid in its 
 success ; and first-class men will always be found to fill 
 its offices, men who will take pride in faithfully per- 
 forming the trust reposed in them. 
 
 We have now spoken of the general features of the 
 scheme upon which the co-operative savings and loan 
 associations are organized and conducted, necessarily 
 
40 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 in this general outline omitting many details which 
 will fully appear in subsequent chapters. 
 
 We submit to the reader with confidence in our 
 assumption that no scheme has been devised for finan- 
 cial co-operation among men of small means that ex- 
 cels the one we have thus outlined in simplicity, in 
 safety, in accomplishing an equitable division of bene- 
 fits, and in the certainty of success. 
 
 We have not outlined an organization to be formed 
 upon some finely wrought theory, but one that has been 
 most thoroughly tried and very uniformly met the 
 expectation of those united in the enterprise. It is 
 not an organization for a few to make large profits at 
 the expense of the many ; or one wherein the borrower 
 pays a large interest for the benefit of the shareholder 
 who does not borrow. All stand upon equal footing. 
 It does not encourage speculation, but steady savings ; 
 and to attain them, there must be industry and frugal 
 habits. It encourages home-building and all the bless- 
 ings that naturally flow from it. 
 
CHAPTER IV. 
 
 THE GKOWTH AND SPREAD OF CO-OPEEATIVE SAV- 
 INGS AND BUILDING-LOAN ASSOCIATIONS. 
 
 AT the present time the data requisite for writing a 
 full history of the growth and spread of the co-oper- 
 ative savings and building-loan associations in the 
 United States can not be obtained. We can only 
 give a brief outline. Their operations and develop- 
 ment have been so quiet and unobtrusive they have 
 not attracted general attention until within the last 
 three years. Among the great mass of American 
 citizens their existence even has been unknown. As 
 a rule, they have not been under State supervision, 
 and no public record has been kept of their number, 
 or of the business transacted by them. Even in the 
 localities where they have been most numerous and 
 best managed, the beneficial results flowing from 
 them have not, until recently, been to any great ex- 
 tent spread before the public. As a factor in co-op- 
 eration they have not received the attention they 
 deserve. 
 
 In 1887, the American Economic Association 
 gave them due prominence in their monographs 
 upon co-operation. During that year they began to 
 attract the attention, quite generally, of the daily 
 
4:2 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 press, and at the present time no form of direct co- 
 operation is attracting the attention of the public so 
 generally as these associations. The scheme under 
 which they were first conducted has undergone many 
 changes and modifications. Of this feature in their 
 history, we shall speak in the next chapter. With 
 these changes, have arisen changes in their names. 
 The first name given to them was " Building Associ- 
 ations." This was succeeded by " Building and Loan 
 Associations." This has been the most universal 
 name by which they have been designated ; but a great 
 variety of other names have come into use, such as 
 "Mutual Loan Associations," "Savings-Fund and 
 Loan Associations," " Homestead Aid Associations," 
 " Co-operative Savings and Loan Associations," " Co- 
 operative Banks," etc. The best generic term now in 
 use seems to us, is the name adopted by the New York 
 State League, viz., " Co-operative Savings and Build- 
 ing-Loan Associations." This name gives the four 
 conspicuous objects in their business, namely, co-oper- 
 ation, for the purpose of stimulating savings, for build- 
 ing homes and making loans therefor. 
 
 From data * that seem reliable, we learn that the 
 first building association in this country was or- 
 ganized in a suburb of the city of Philadelphia, called 
 Frankford, January 3, 1831, and named the " Oxford 
 Provident Building Association." The scheme was 
 simple. There was a single series of stock, entrance 
 fee of five dollars, monthly dues on each share of stock 
 three dollars, and matured value of shares $500. The 
 shares reached their maturity in ten years and six 
 
 * A book entitled " ITow to Manage Building Associations," by 
 Edmund Wrigley, of Philadelphia, published in 1S73. 
 
GROWTH AND SPREAD. 43 
 
 months, and the association was dissolved. A new 
 association of the same name was formed at once. 
 
 Another similar association was formed in the same 
 place in 1845, called the " Franklin Building Associa- 
 tion," in which the matured value of the shares was 
 placed at $200 and monthly dues at one dollar. In 
 1847, an association similar to the Franklin was organ- 
 ized in the Kensington District of Philadelphia. The 
 number of shares was limited to five hundred; the 
 matured value of shares $200, and monthly dues of 
 one dollar. 
 
 During the last years of that decade, the organi- 
 zation of these associations in Philadelphia was very 
 rapid. Until 1849 or 1850 none were incorporated. 
 They were simply voluntary associations, holding their 
 property through the medium of trustees. Yet so 
 rapid had been their growth in that city that fifty or 
 more were organized between 1831 and 1849. The 
 laws of the State of Pennylvania passed in 1850, pro- 
 viding for their incorporation, limited the number of 
 shares which an association could issue to five hundred. 
 In 1859 the law was amended by increasing the limit to 
 2,500 shares, of $200 each matured value. In 1874 the 
 law was further amended by removing the limit as to 
 the number of shares, but limiting the aggregate value 
 of the stock an association might have outstanding to 
 $1,000,000. 
 
 We have no data at hand of the number of associ- 
 ations chartered from 1850 to 1859 inclusive ; but dur- 
 ing the decade of 1860 to 1869 inclusive one hundred 
 and forty-eight associations were chartered ; and from 
 1870 to 1875 inclusive three hundred and seventeen 
 were chartered. In 1876, the centennial year, there 
 
44 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 were in active operation in Philadelphia alone at least 
 four hundred and fifty associations. We believe it a 
 safe estimate to make, that such number exceeded the 
 total number of associations in all places in the United 
 States. M. J. Brown, editor and proprietor of the 
 " Building Association and Home Journal," now places 
 the total number of associations in the State of Pensyl- 
 vania at nine hundred, of which four hundred and 
 fifty are located in the city of Philadelphia, and four 
 hundred and fifty in other parts of the State. Hence 
 it can be said with great fitness that Philadelphia has 
 been the "breeding-place" of these associations in 
 America.* 
 
 Prof. F. B. Sanborn, Secretary of the American 
 Social Science Association, in 1888 asked Mr. Brown 
 the question as to the amount of capital invested in 
 these associations in Philadelphia and in all Pennsyl- 
 vania, and we quote the following from Prof. San- 
 born's report : " M. J. Brown has undertaken to answer 
 this question, and his figures, although partly esti- 
 mates, are of great value. He examined the sworn 
 accounts of one hundred and twenty building associa- 
 tions with the following results : Aggregate capital, 
 $8,749,337 ; average capital, $72,911 ; aggregate shares, 
 151,680 ; average shares, 1,264. Applying this ratio to 
 the three hundred and thirty Philadelphia associations, 
 their aggregate capital becomes $32,810,017, and the 
 total number of their shares 568,800." 
 
 The total estimate for the State reaches $60,000,000 
 of capital, and nearly 1,000,000 shares. 
 
 * Prof. F. B. Sanborn's report on " Co-operative Building," read 
 at the September meeting of the American Social Science Associa- 
 tion at Saratoga in 1888. 
 
GROWTH AND SPREAD. 45 
 
 Dr. R. T. Ely, in his " Labor Movement in Ameri- 
 ca," published in 1886, says : " Six years ago it was 
 officially stated that 60,000 comfortable homes had 
 been constructed in Philadelphia alone through the 
 aid derived from the building associations, and it is 
 certain Mr. Barnard did not exaggerate when he en- 
 titled the chapter describing them, in his work on 
 ' Co-operation as a Business,' ' One Hundred Thous- 
 and Homes.' " 
 
 The influence of these associations has been most 
 potent in encouraging home-owning and home-build- 
 ing among the wage- workers of Pennsylvania ; and it 
 is asserted that there is no city in the Union of its 
 size, or approximating to it, where so many of the 
 wage-earners own their homes as in Philadelphia. We 
 believe it a fact to be noted, that in no city of its age 
 or approximate population does the anarchist or ex- 
 treme socialist find so few followers as in this city. 
 
 From Pennsylvania these associations have spread 
 into almost every State in the Union. 
 
 New Jersey. 
 
 The Bureau of Statistics of Labor and Industries 
 of New Jersey is to be commended for the interest 
 and enterprise it has manifested in collecting statistics 
 relating to this form of co-operation in that State. 
 No bureau of labor or statistics in any other State, 
 except Massachusetts, has, until the present time, 
 deemed them of sufficient importance to demand at- 
 tention. In 1880, 1882, 1884, and 1886, the New 
 Jersey Bureau collected data regarding these associa- 
 tions. We quote as follows from their report for 
 1886: 
 
46 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 In 1880, when the bureau first endeavored to collect in- 
 formation from the building and loan associations in this 
 State, there were reported to be in existence one hundred 
 and six of these societies, but less than one half (fifty-one) 
 favored us with returns. These aggregated, in net assets, 
 $4,002,647", and about forty-seven thousand shares, or an 
 average of $78,483 assets and nine hundred and twenty-one 
 shares to the association. Previous to the year mentioned, 
 no such statistics had been available, and, except in the im- 
 mediate localities where they flourished, no one had any idea 
 of the extent or condition of the New Jersey co-operative 
 building enterprises something which had much to do with 
 intercepting their development. 
 
 Our publication, incomplete as it was, met with much 
 favor and attracted considerable attention throughout the 
 State to this form of co-operation. And when, two years 
 later, in 1882, we again investigated the subject, one hun- 
 dred and eighteen secretaries, without exception, cheerfully 
 sent in replies. According to our estimate, there were dur- 
 ing that year one hundred and twenty-eight New Jersey 
 building and loan associations, of which twelve "terminat- 
 ing" ones were reported to be closing up, that is, their 
 shares had matured. The aggregate returns from the one 
 hundred and eighteen organizations, of which the majority 
 were serial or perpetual, gave 102,075 shares, owned by 
 20,000 members, of whom fully 6,000 were borrowers. The 
 assets amounted to $6,748,775. The averages were, there- 
 fore, eight hundred and sixty-four shares, one hundred and 
 seventy shareholders, and $57,192 assets an apparent de- 
 crease, easily accounted for by the fact that very many small 
 societies, not reporting in 1880, made returns. 
 
 In 1884 there were said to be in existence one hundred 
 and twenty-nine building and loan associations, a number of 
 which had been organized since the statements for 1882 ap- 
 peared, while several of the terminating societies running at 
 that time had been " wound up." ... It was estimated 
 that the net assets of all the New Jersey associations in 1884 
 
GROWTH AND SPREAD. 47 
 
 amounted to $7,000,000, and that of our wage-workers who 
 had secured homes, at least 4,000 were then engaged in pay- 
 ing off mortgages with assistance obtained as shareholders. 
 
 The fourth census of our building and loan enterprises 
 was made by the bureau at the close of the present year. 
 On October 1st a circular was sent to the various associa- 
 tions, the names of the newly- organized ones having been 
 obtained from the county clerks, asking for the information 
 tabulated in the tables below, which give the statistical 
 details of one hundred and fifty- six organizations in active 
 operation at that date. . . . The number stated, one hun- 
 dred and fifty-six, therefore includes all the active associa- 
 tions at the beginning of the fall. Since then and up to the 
 close of the year, several more have been incorporated, so 
 that the total at present can not be far from one hundred 
 and seventy a very rapid increase within the past two years. 
 From the reports which have been forwarded to the bureau, 
 these New Jersey associations are generally in a very pros- 
 perous condition, and a great benefit, not only to the indi- 
 vidual members, but to the community at large ; for they 
 are increasing the number of tax-paying, property-owning 
 citizens, and making it comparatively easy for an industrious 
 workingman to own a home. The improvement has been 
 noticeable in the northern part of the State, especially in 
 Essex and Hudson Counties, where the number of the asso- 
 ciations has doubled since 1884, and both Jersey City and 
 Newark now each support a building and loan journal the 
 " News " and u Advocate " the only newspapers of the kind 
 published in the State. ... A summary of the statistics of 
 the one hundred and fifty-six New Jersey associations shows 
 the following results : 37,730 shareholders holding 204,653 
 shares, or an average of two hundred and forty-two members 
 and over thirteen hundred shares five and a half to each 
 shareholder. The net assets foot up $9,349,517.46, or nearly 
 $60,000 to an association. Of the members, nearly two 
 thirds are wage-earners, and 8,562, or over one fifth, are 
 borrowers. Of the latter, 5,354, or over sixty per cent, are 
 
48 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 workingmen. Over one fifth of the shares, or 42, 373, have 
 been borrowed on. The profits of one hundred and forty- 
 two associations (net assets, $8,915,120) were $1,706,649, or 
 an average of $12,018 for $50,764 paid in dues; that is, 23.7 
 per cent for the average time (two years and a half) the 
 shares have run about nine and a half per cent a year. The 
 incidental expenses have averaged, for one hundred and ten 
 associations, $353 annually. 
 
 From the tabulated statements of facts in said re- 
 port, relating to the one hundred and fifty-six associa- 
 tions that reported in detail to the bureau in 1886, 
 we learn that about fifty-six were organized on the 
 single series, or terminating plan, and about one hun- 
 dred on the serial, or permanent plan ; that the county 
 of Camden had twenty-four associations, all upon the 
 permanent plan ; the county of Essex twenty-four, of 
 which eight were on the terminating plan ; the county 
 of Hudson twenty-one, of which all were on the ter- 
 minating plan except six; the county of Middlesex 
 fifteen, all of which were of the terminating kind ex- 
 cept two ; the county of Burlington had thirteen, of 
 which all were of the permanent plan except two. 
 
 One of the largest associations in the State, at the 
 date of the report, was the " People's Building and 
 Loan Association," at Harrison. This association was 
 organized in 1873 on the serial plan. At the date of 
 its annual report, in 1886, it had outstanding 5,017^ 
 shares, held by 1,046 shareholders, distributed into 
 eleven series, and of the aggregate value of $192,947.31. 
 The matured value of shares is $200, and monthly 
 dues are one dollar. The whole number of shareholders 
 were reported to be wage-earners. The constitution 
 of this association is printed in the bureau's report, in 
 
GROWTH AND SPREAD. 49 
 
 full, with the remark, that " the constitution of this 
 association is reproduced below, and, as it is generally 
 considered to be a very good one, may serve as a model 
 for new enterprises." * 
 
 The first association in New Jersey was organized 
 prior to 1847, but that was the year in which the 
 Legislature first passed an act authorizing their incor- 
 poration ; another act was passed in 1849, which was 
 revised in 1875. The law for incorporation is very 
 general in its terms, and permits an endless variety in 
 the schemes upon which the business may be con- 
 ducted. Their growth and prosperity in this State 
 continues, and at the present time there are not less 
 than one hundred and eighty associations. 
 
 Massachusetts. 
 
 "We are able to obtain full statistics with reference 
 to loan associations in the State of Massachusetts from 
 the reports of the Commissioners of Savings-Banks of 
 that State. 
 
 The Hon. Josiah Quincy, now deceased, became 
 deeply interested in these associations as a means of 
 stimulating the wage-workers in the matter of savings, 
 home-building, and home-owning. As the result of 
 his endeavors, a general act providing for their incor- 
 poration was passed in 1877. By that act, they were 
 named "Co-operative Saving-Fund and Loan Asso- 
 ciations." In 1883 the act was amended, so that they 
 were named " Co-operative Banks," and this is the 
 name by which they are now designated in this State. 
 
 This general act for their incorporation was care- 
 fully prepared by experts in Philadelphia, as we are 
 * See Appendix. 
 
50 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 informed, and outlines a definite scheme for the or- 
 ganization and conduct of their business. Under this 
 scheme, the associations are permanent issuing quar- 
 terly, semi-yearly, or yearly series, as the association 
 shall determine. The matured value of shares is $200, 
 monthly dues are one dollar, and the accumulated 
 capital is not to exceed $1,000,000. 
 
 From the report of the Savings-Bank Commission- 
 ers of Massachusetts, dated December 31, 1887, we 
 learn that on October 31, 1887, the total number of 
 co-operative banks was fifty-one a gain of eleven dur- 
 ing the last year ; that their total assets were $4,211,- 
 948.86 a gain in one year of $982,982.24. The total 
 number of shares outstanding, 134,864 ; the total num- 
 ber of shareholders, 20,735, of whom 3,797 were bor- 
 rowers. 
 
 From the date of that report up to September 1, 
 1888, it is authoritatively reported that thirteen new 
 co-operative banks were organized, making a total of 
 sixty-four. 
 
 The first of these banks, organized under the act 
 of 1877, was the Pioneer Co-operative Bank of Boston. 
 The largest of these banks is at Waltham ; its assets, 
 October 31, 1887, were $337,647.29; number of shares 
 outstanding, 8,893 ; number of shareholders, 1,488, of 
 whom 288 were borrowers. 
 
 Of the sixty-four banks, about eleven are in Bos- 
 ton, and the rest are well distributed throughout the 
 cities and large towns of Massachusetts there being 
 three in Worcester, three in Taunton, two in Fall 
 Kiver, and one each in Lowell, Lynn, New Bedford, 
 Cambridge, Chelsea, Somerville, Springfield, Holyoke, 
 Westfield, Fitchburg, Waltham, Woburn, etc. But 
 
GROWTH AND SPREAD. 51 
 
 three of the twenty-five cities of the State are without 
 one, while many of the larger towns where skilled 
 workmen are employed have each one of these banks. 
 The number of these savings institutions is now in- 
 creasing more rapidly than ever. They are all con- 
 ducted upon the same scheme, except that the law 
 admits of the bank deciding for itself whether it will 
 adopt the installment premium plan or the interest 
 premium plan. They are under State supervision. 
 Massachusetts now justly ranks at the head in its legis- 
 lation relative to these associations. Under its laws, 
 the danger of wild speculative schemes coming in vogue 
 is wholly averted. 
 
 Maine. 
 
 Loan associations have not developed yet to any 
 considerable extent in Maine, there being but ten or 
 twelve in the State at the present time. These have 
 been principally organized during the last five years. 
 
 New Hampshire. 
 
 In New Hampshire there are but four associations, 
 all organized since 1887. 
 
 Rhode Island. 
 
 There are said to be but three associations in this 
 State, the leading one being at Providence. 
 
 Vermont. 
 
 There is at present no law for the incorporation 
 and organization of loan associations in Vermont, and, 
 so far as we have been able to ascertain, none have 
 been organized. 
 
 ^sr 
 
 OF THB 
 
 [UJXTBRSITtf 
 
52 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Connecticut. 
 
 Prof. Sanborn, in the report before cited, says: 
 " In Connecticut there are six or seven associations in 
 different parts of the State ; one at New Haven having 
 a special charter, and the rest are voluntary associa- 
 tions, having no incorporation." There is one located 
 at Meriden, called " The Meriden Permanent Building 
 and Loan Association." 
 
 Much interest in these associations is now develop- 
 ing in this State, and without doubt a law authorizing 
 their incorporation will soon be passed. Connecticut 
 passed through an unfortunate experience with build- 
 ing associations in former years ; but the schemes upon 
 which they were organized and conducted were widely 
 apart from the scheme of the true building and loan 
 association. C. F. Southard is our authority for saying 
 that the methods of these old associations resulted in so 
 much of popular feeling against them that the Legis- 
 lature instituted a searching investigation concerning 
 them, and, as a result, in 1860 savings and building 
 associations were forbidden to receive deposits after 
 January 1, 1862, and in 1865 they were required to 
 return all deposits on or before July 1, 1866, which 
 practically wound them up. The law under which 
 they were organized was repealed. 
 
 The associations now forming in this State are or- 
 ganized upon safer methods. So much of interest is 
 aroused in them that a newspaper called " The Build- 
 ing News and Household Journal " is now published 
 at Meriden, devoted to the Meriden building and loan 
 associations and co-operative and fraternal societies. 
 
GROWTH AND SPREAD. 53 
 
 New York. 
 
 Of the early history of loan and building associa- 
 tions in New York very little reliable data are to be 
 obtained. An act was passed for their incorporation in 
 1851. There were some associations in the State at 
 that time. Between 1849 and 1859 a large number of 
 associations were formed, but the act of 1851 outlined 
 no definite scheme. It was so general in its provisions 
 that it permitted the incorporation of any scheme, 
 whether good or bad. The bad schemes, and especially 
 those of a speculative character, came into great promi- 
 nence. Promises were made by the organizers of the 
 associations which could not be fulfilled. Heavy losses 
 were sustained in many places by the confiding share- 
 holders, and generally the expectations of those invest- 
 ing in them were not realized. They consequently fell 
 into popular disfavor. C. F. Southard is authority for 
 saying that such disfavor culminated in the Legislature 
 appointing a committee of three to investigate them, 
 and that such committee reported in favor of revoking 
 the charters of all ; but the report was not adopted. 
 The number in the State at the time of the investiga- 
 tion was one hundred and twenty-four.* 
 
 It is certain that in 1870 there were very few asso- 
 ciations in the State of New York. The city of Koch- 
 ester and vicinity is now the banner locality in the 
 number and success of these associations, in proportion 
 to the population. They number at the present time 
 eighty-three, and are forming so rapidly that before this 
 statement is printed their number may reach a hundred. 
 
 The first association in this city was organized in 
 
 * C. F. Southard in an article in the " New York Star," September 
 9, 1888. See also "Assembly Documents," 1856, vol. iii, No. 46. 
 
54: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 1852, but did not continue long; not meeting the ex- 
 pectation of its stockholders, its affairs were closed up. 
 The next association was not organized until 1871. 
 There was quite a " boom " for a few years in their 
 growth. During 1871 and 1872 some " building lots " 
 associations were formed in that city ; that is, associa- 
 tions which bought a tract of land, and then sold lots 
 to be paid for in monthly or weekly sums, much after 
 the manner of the true building and loan associations. 
 Many of the shareholders built houses. The associa- 
 tions ran in debt for the land, giving a mortgage upon 
 it. Several proved financial failures, and in due time 
 the mortgage was foreclosed, and the savings of those 
 who had invested were lost. These were confounded 
 in the public mind with the true building and loan 
 associations, and injured them much. It was not until 
 1882 that they began to increase again. " The Home- 
 stead Loan Association of Rochester," organized upon 
 the terminating plan, was then reorganized upon a 
 permanent plan, and has taken the lead of all associa- 
 tions in the State. According to its annual report, 
 October 7, 1887, it had 1,506 shareholders, of whom 
 261 were borrowers ; it had outstanding 17,512 un- 
 matured shares and 502 matured shares, and its assets 
 amounted to $270,266.51. 
 
 The first association in Buffalo was organized Aug. 
 6, 1851, the second in 1860. They have been very 
 successful in that city. While there are no accurate 
 statistics as to the number, and estimates differ widely, 
 the lowest estimate is one hundred.* One of the old- 
 
 * From a search recently made in the clerk's office of Erie 
 County, we learn that the total number which have been incor- 
 porated in that county amounts to 327. Until recent years they 
 
GROWTH AND SPREAD. 55 
 
 est, if not the oldest, association in the State now doing 
 business was organized in Elmira in 1875, and called 
 " The Chemung Valley Mutual Loan Association." It 
 was organized upon the scheme of issuing a yearly series 
 of stock ; matured value of shares, $200 ; monthly dues 
 of one dollar, and monthly interest at six per cent. It 
 is now in its fourteenth financial year, and eminently 
 successful. From it as a model others have been or- 
 ganized in the Southern Tier counties. The president 
 of this association drafted the New York Act of 1887 
 for the incorporation of co-operative savings and loan 
 associations before mentioned ; and many of the recently 
 organized associations have organized under its provis- 
 ions. The passage of this act through the Legislature 
 drew attention to the associations throughout the State. 
 About the same time persons in New York became in- 
 terested in them, and began to write them up in the 
 daily press. About two years ago the publication of a 
 monthly paper was commenced in the city of New 
 York, known as the " Building and Loan News." It 
 has served as a channel for the exchange of views be- 
 tween those interested in the subject, and its publisher 
 and his friends have done much during the last two 
 years to arouse public interest therein. About the 
 same time several of the New York dailies began writ- 
 ing the plan up, and associations were formed by em- 
 ployes of several of the papers. The " Star " became 
 a notable champion through the graceful pen of C. F. 
 Southard, who has done much for co-operative associa- 
 tion in New York and its vicinity. 
 
 were organized upon the single-series plan, and nearly all associa- 
 tions organized more than ten years ago have matured their stock 
 and ceased to exist. 
 
56 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 As a result of all this movement there has come to 
 pass a regular " boom " in building and loan associa- 
 tions in the cities of New York, Brooklyn, and neigh- 
 borhood, and it is now extending throughout the whole 
 State. At the present time there are thirty associa- 
 tions in New York, eighteen in Brooklyn, four in 
 Westchester, and in the whole State of New York 
 about two hundred and seventy-five. They are now 
 organizing with great rapidity, and I have no doubt 
 that on January 1, 1890, there will be four hundred 
 associations in the State of New York. 
 
 A State League was organized in June, 1888, which 
 promises to have great influence in legislation affecting 
 these associations. Mr. George W. Elliott, of Eoches- 
 ter, is president of the League, and Charles 0. C. Hen- 
 nessy, of New York, is its secretary. 
 
 Ohio. 
 
 Ohio ranks next to Pennsylvania in the number of 
 its associations. No accurate statistics, however, have 
 been gathered with reference to them, and only a 
 proximate estimate can be made as to their number. 
 Prof. F. B. Sanborn, in his report before mentioned,* 
 says it is supposed that their number in Ohio exceeds 
 six hundred. Of this number, about four hundred are 
 in Hamilton County. The first association in the State 
 was organized in 1857 in the city of Cincinnati. Dr. 
 P. A. Peck was the promoter of its organization, and 
 became the champion of these organizations in their 
 early history in that city. 
 
 It seems they have outrun his expectations, and 
 
 * Report to American Social Science Association in September, 
 1888. 
 
GROWTH AND SPREAD. 57 
 
 have increased in numbers beyond the requirements of 
 the community. In writing of his work for these as- 
 sociations three years ago, he said : " There are too 
 many building associations. At the time I started the 
 system I thought that five or six societies would be 
 enough for the needs of the people of this city ; but 
 now there are so many I think a great many people 
 suffer by it. ... Some of the members, instead of 
 paying their debts, put their weekly earnings into these 
 associations. ... It is my opinion that societies nowa- 
 days pay too much in the way of salaries and current 
 expenses." 
 
 It is estimated that the shareholders in Cincinnati 
 exceed seventy-five thousand. In this city these asso- 
 ciations far outstrip the savings-banks in the amount 
 of their investments and the number of their deposit- 
 ors. There is located at Dayton one of the largest, if 
 not the largest, association in the United States. It is 
 called the " Mutual Home and Savings Association." 
 The scheme upon which its business is conducted is 
 widely divergent from the true scheme of the building 
 and loan association. It issues shares of $100 and $500 
 matured value. It also permits shares to be paid up 
 in full at one payment, and then pays cash dividends 
 upon such shares. It has an office open during busi- 
 ness hours for the receipt of dues, interest, etc. It 
 amounts, in fact, to a bank, involving in the conduct 
 of its business many of the beneficial principles be- 
 longing to the true building and loan association ; but 
 instead of being purely a co-operative savings and loan 
 association, it becomes an institution in which the 
 capitalist can invest a considerable sum of money in 
 one lump in the purchase of paid-up stock, and hold 
 5 
 
58 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the same as an investment. The true co-operative 
 savings and loan association allows only weekly or 
 monthly payments to be made for the purpose of accu- 
 mulating savings. The law in Ohio, under which these 
 associations are conducted, was amended in 1886 after 
 much discussion. They have not, however, as yet, 
 been brought under State supervision. 
 
 Illinois. 
 
 The first building and loan association organized 
 in Illinois, and in fact in the West, was in 1849, in 
 Chicago, under the name of " The Chicago Building 
 Association." It conducted business without a char- 
 ter until 1851, when it was chartered by special act of 
 the Legislature. The next association in this State 
 was organized at Jerseyville, in 1852, and the third at 
 Chicago in 1857. It was not until 1869 that a general 
 act was passed authorizing their incorporation ; but 
 prior to that many had been incorporated by special 
 act of the Legislature. The statute of 1869 authorized 
 the incorporation of associations for purposes widely 
 divergent from the true building and loan association, 
 as the following quotation shows. It authorized a 
 number of persons to " form themselves into an incor- 
 porated company for the purpose of accumulating a 
 fund for the purchase of real estate in large tracts, 
 paying off incumbrances thereon, the improvement 
 thereof into lots and parcels suitable for homesteads, 
 and the distribution of such lots or parcels among the 
 shareholders." 
 
 Then follows provisions covering the legitimate 
 building and loan association. In 1872 a law was 
 passed, patterned after the laws of Pennsylvania at 
 
GROWTH AND SPREAD. 59 
 
 that time, which superseded the law of 1869. In 1874 
 this law was repealed, it is claimed, through the influ- 
 ence of those interested in savings-banks. In 1879 
 the law, substantially of 1872, was re-enacted. In 1880 
 a member of an association at Monticello, incorporated 
 under the act of 1872 while in force, refused to pay 
 his loan, alleging that the following section of the act 
 of 1872 was in conflict with the Constitution of the 
 State. " Corporations organized under this act being 
 of the nature of co-operative associations, therefore, no 
 premiums, fines, nor interest on such premiums that 
 may accrue to the said corporations according to the 
 provisions of this act shall be deemed usurious, and 
 the same may be collected as any other debt of like 
 amount may be collected by law in this State." 
 
 In the lower court the claim of the refractory bor- 
 rower was sustained ; and this decision was affirmed in 
 the Supreme Court of the State. At that time there 
 were twenty associations in the State. By union of 
 action on the part of some fourteen of this number, a 
 reargument was obtained in the Supreme Court, and 
 upon such rehearing the court reversed its first ruling, 
 and held that the statute was constitutional. This 
 decision marks the beginning of a new era in building 
 and loan associations in Illinois. It called into exist- 
 ence the Illinois Building Association League, which 
 has done much to advance the interests of associations. 
 Through its influence two amendments to the law were 
 passed in 1888, one authorizing the installment plan 
 of paying premiums, and the other exempting the 
 stock and mortgages of the associations from taxation. 
 The provisions of the law do not provide for State su- 
 pervision. That subject is now being agitated. 
 
60 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Since the decision before mentioned, building asso- 
 ciations have increased in number with great rapidity, 
 until there is claimed to be over two hundred and fifty 
 in Chicago and nearly three hundred in other parts of 
 the State. From my own investigations, I am led to 
 believe that the number is as large in Illinois as in 
 Ohio. A local league of the associations in Chicago 
 and vicinity has recently been formed. One of the 
 best newspapers in the country devoted to these asso- 
 ciations is published at Chicago, under the name of 
 " The American Building Associations News." * 
 
 Wisconsin. 
 
 The Secretary of State has kindly furnished us a 
 list of all the associations in this State that have filed 
 certificates of incorporation in his office up to the 
 month of November, 1888. The total number at that 
 date was forty-two. They were located in twenty cities 
 and villages. Milwaukee had twenty of this number ; 
 Chippewa Falls, Superior, Lacrosse, and Oshkosh two 
 each, while each of the remaining localities had but 
 one. 
 
 It is somewhat remarkable that over one half, or 
 twenty-three, of the total number were incorporated 
 in 1887. Five were incorporated in 1886; four in 
 1885 ; three in 1884 ; and two in 1883. Five were in- 
 corporated in 1888 up to the month of November. 
 
 This list shows the oldest association was incor- 
 porated October 17, 1883, located at Appleton, and 
 called " The People's Saving-Fund and Building As- 
 
 * For many of the facts in the foregoing relating to Illinois we 
 are indebted to a report prepared by Prof. Jenks, of Galesburg, for 
 the American Social Science meeting in 1888. 
 
GROWTH AND SPREAD. 61 
 
 sociation." We are led to believe that there must 
 have been some associations in this State before that 
 date, but they were not required to file their certificates 
 of incorporation in the office of the Secretary of State. 
 
 We are led to this conclusion from the course of 
 legislation. The Eevised Statutes of the State, adopted 
 in 1878, authorized the incorporation of these asso- 
 ciations. The statute provided that the capital stock 
 should not exceed $500,000, and should be divided 
 into shares of $200 each. In 1882 the law was amended, 
 providing that the capital might be divided into shares 
 of not less than twenty- five dollars, nor more than two 
 hundred dollars. Other amendments were made at 
 this time. This legislation occurred before the organi- 
 zation of the associations at Appleton, and was un- 
 doubtedly had to meet the wishes of some association 
 or associations then in existence. The law was again 
 amended in 1885, providing that the capital stock 
 might be five millions. 
 
 The law was further amended in 1887, and, among 
 other provisions, exempted the capital and investments 
 of the associations from taxation, except in the case of 
 real estate bid in by the association under some lien 
 held thereon by the association. This exemption from 
 taxation may account for the great " boom " in their 
 organization in 1887. It seems that the reverse of the 
 experience of most States is occurring in Wisconsin. 
 Secretaries report to me that earlier associations were 
 established on the serial plan of issuing stock, and that 
 many of the latter associations are upon the terminat- 
 ing plan. 
 
62 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Michigan and Indiana. 
 
 Concerning loan associations in Michigan we have 
 no data beyond the fact that some were established 
 there many years ago ; that the result of their busi- 
 ness, as a whole, has not been satisfactory, and they 
 declined in popularity; but at present their number 
 is increasing again, and at the time of this writing a 
 movement is on foot to form a State league. 
 
 In Indiana their number has been increasing re- 
 cently with great rapidity, especially in the city of 
 Indianapolis. Their number has become numerous 
 enough in that city to bring into existence a paper 
 called the "Building Association Kegister." Some 
 time ago this paper stated that they were organizing 
 at the rate of one a day in Indiana. By far the larger 
 number were organizing upon the terminating plan. 
 The law of the State provides no uniformity in plan, 
 and the result is the same here as elsewhere there is 
 a great diversity in the schemes upon which their busi- 
 ness is conducted. 
 
 Our data is insufficient to warrant us in giving any 
 facts further than we have already stated. 
 
 Minnesota. 
 
 In Minnesota, loan associations have attained their 
 greatest development in the twin cities of Minneapolis 
 and St. Paul. No statistics have so far been collated 
 by an official bureau of the State. 
 
 The fullest information we have been able to ob- 
 tain is from a monograph by Albert Shaw, published 
 in September, 1886, by the American Economic Asso- 
 ciation, entitled " Co-operation in a Western City." He 
 
GROWTH AND SPREAD. 63 
 
 says: "The form of co-operative enterprise that has 
 attained far greater results in the United States than 
 all others combined is that of the well-known and 
 almost invariably successful building and loan associa- 
 tion. Several of the most flourishing building and loan 
 associations to be found anywhere in the country are 
 established in the cities of Minneapolis and St. Paul 
 In the former city, the first was organized in 1874." 
 
 Mr. Shaw tells us that, in Minneapolis, "about one 
 thousand homes have thus far been secured for work- 
 ingmen by the building and loan associations, and 
 their operations have only fairly begun. It may be 
 reasonably estimated that two hundred and fifty more 
 families will be domiciled through the agency of the 
 associations in 1887, and that the number will increase 
 a hundred a year thereafter for some years to come, 
 producing results not only of great consequence eco- 
 nomically, but of inestimable moral and social value." 
 
 The first association was organized in St. Paul in 
 1869. The idea was taken there by one Theodore 
 Sanders from Philadelphia. There are now over forty 
 of these associations, and their total membership " must 
 exceed six thousand, representing fully one fourth of 
 the families in the city. Mr. Shaw further says : " The 
 estimate that from eight to ten thousand homes in St. 
 Paul have been, in whole or in part, secured to their 
 owners with money advanced by the building societies 
 might seem extravagant ; but I must conclude that the 
 facts bear it out." The associations in these two cit- 
 ies continue, without any material change, the present 
 Philadelphia systems of building associations. Asso- 
 ciations have been established at Duluth and other 
 places in the State. 
 
64 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Iowa, Kansas, and Missouri. 
 
 The number of loan associations in Iowa is not 
 large. The first was organized at Burlington in 1870, 
 and the second at Keokuk and Oskaloosa in 1872. 
 There are some at Des Moines and in other parts of 
 the State. There has recently been organized at Des 
 Moines what is called the " Suburban-Home Building 
 Association," the plan of which is to buy a tract of 
 land and build houses thereon, and sell the same to 
 stockholders, who make payments weekly or monthly 
 upon the general plan of the true building and loan 
 association. Schemes such as this, have, as a rule, 
 brought more evil than good to the stockholders. In 
 the State of .New York, at Kochester, "building-lot 
 associations," through failure, for years, placed the true 
 building and loan associations in disfavor. The asso- 
 ciations of this class are very largely speculative, and 
 hence wholly outside of the class of associations which 
 uniformly prove a blessing to those engaged, and friends 
 of true co-operation should regard them with suspicion. 
 
 In regard to Kansas we have no data that is re- 
 liable. 
 
 In Missouri, loan associations have been growing 
 with great rapidity for a few years. Of the precise 
 number we are not informed, but they exceed fifty and 
 may reach one hundred. A question of great interest 
 to them is now in litigation in the courts of the State. 
 On March 31, 1887, the laws authorizing their incor- 
 poration were amended in many particulars. The 
 amendatory act contained a provision exempting these 
 associations from taxation, on the ground that they 
 were benevolent associations, and consequently might 
 
GROWTH AND SPREAD. 65 
 
 be so exempted under Article X, section 21 of the 
 Constitution of the State. The Secretary of State 
 disagreed with such interpretation, and refused to issue 
 certificates of incorporation until the tax upon the 
 capital was deposited with the State Treasurer, to be 
 held by him until the courts passed upon the validity 
 of the act. This arrangement was entered into by 
 some thirty-four associations. The result of this liti- 
 gation will have great influence upon the future of 
 these associations in the State of Missouri. 
 
 Maryland. 
 
 The first act for the incorporation of loan associa- 
 tions was passed in Maryland, April 17, 1843 ; but 
 according to data received by us from that State no 
 association was formed until March, 1846. An associ- 
 ation was then formed the organizers meeting in a 
 church on St. Charles Street and named " The Balti- 
 more Building and Loan Association." As elsewhere, 
 so here, the first associations were upon the terminat- 
 ing plan, but of late the serial plan is taking the lead, 
 until three fourths of the associations issue their stock 
 upon that plan. The matured value of a share is 
 usually fixed at $100, and dues twenty-five cents 
 weekly, payable to the society prior to the stated 
 weekly meeting, or at the meeting. Weekly interest 
 on a borrowed share is placed at twelve cents. 
 
 Those associations have been quite uniformly suc- 
 cessful in this State. In the city of Baltimore their 
 membership is largely artisans, clerks, and railroad 
 men men working for wages. In the rural parts of 
 the State there are some associations embracing in 
 their membership many of the prominent men in the 
 
66 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 community. The total number of associations in the 
 State at the present time, as we are informed upon 
 trustworthy authority, is one hundred and ninety-one, 
 of which one hundred and fifty-eight are located in 
 Baltimore.* 
 
 Southern States. 
 
 "VVe have no data relating to the extent of loan 
 associations in the Southern States beyond that con- 
 tained in Prof. F. B. Sanborn's report, before men- 
 tioned, to the " American Social Science Association." 
 We quote from it as follows : 
 
 For various reasons, some of which are stated by R. T. 
 Hill, of Texas, in his report concerning provident institu- 
 tions in the extreme Southwest, there have been few accumu- 
 lations of savings in the form of money in the greater part of 
 the South. The number of savings-banks there is small, and 
 building associations are recent and, as yet, comparatively 
 few. Mr. Hill estimates that there are fifty in Texas, which 
 is probably more than in any of the former slave-holding 
 States, unless Maryland be an exception. They are numer- 
 ous in Missouri, and a few are found in Arkansas, Mississippi, 
 Kentucky, Tennesee. Lousiana, Alabama, Georgia, the Caro- 
 linas, and the Virginias. From these States, however, the 
 committee have only scanty reports. There are twenty or 
 more associations in the city of New Orleans, several in At- 
 lanta, one at Georgetown, S. C., one at Key West, Fla., one 
 at Pensacola, one at Selma, Ala., one at Fort Smith, Ark., 
 one at Lafayette, La., one at Parkersburg, W. Va., one each 
 at Yazoo City and Columbus, Miss., and no doubt many 
 
 * These figures are widely divergent from estimates of their 
 numbers which I have seen. Rosenthal's " Manual for Building and 
 Loan Associations," published in August, 1888, at Cincinnati, 
 places the number at five hundred in Baltimore. We believe the 
 figures above given to be correct. 
 
GROWTH AND SPREAD. 67 
 
 others in the above-named States. In Louisana it seems that 
 as long ago as 1873 a building association was formed, 
 which ran its course in ten years, and divided its profits 
 among its members. But the first of the existing New Or- 
 leans associations was organized in September, 1882, and has 
 since been very prosperous, having now about six hundred 
 members, who have built or purchased more than one hun- 
 dred homes during the six years of its existence. Several 
 others of the twenty or thirty New Orleans associations have 
 from three hundred to six hundred members. In Tennesee 
 the associations organized in 1880-81 and in 1885, in order 
 to secure favorable legislation, formed a State union, which, 
 at its organization, included six associations at Memphis,/ 
 four at Nashville, and four or five others in different parts of 
 Tennesee. There are now five or six in Chattanooga, which 
 during seven years past have provided homes for two hun- 
 dred and fifty families, and in all Tennesee there must now 
 be upward of thirty associations. 
 
 Pacific Coast. 
 
 Our data is meager with reference to the Pacific 
 coast. Loan associations have been established at 
 various points, although in many cases the scheme 
 upon which they are conducted is unlike that of the 
 true building and loan association. The element of 
 real-estate speculation enters into their scheme to 
 some extent. In 1887 there were in California eleven 
 associations, with assets of $2,595,488, represented by 
 30,000 shares. 
 
 General Remarks. 
 
 Certain facts have become well established in our 
 investigations. 1. That, as a rule, the current news- 
 paper statements and some of the book literature re- 
 lating to loan associations exaggerate their number in 
 
68 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 localities and States where they are most numerous. 
 2. That, in their early development in almost every 
 State, they have in some degree become speculative in 
 relation to real estate, which in the end has generally 
 proved unsatisfactory, and in many cases losses were 
 sustained by the shareholders, and building and loan 
 associations ceased to be popular. Pennsylvania has 
 been an exception to some extent, and explanation is 
 found in the fact that in that State there has been a 
 closer following of the true principles. The law of the 
 State so limited the number of shares and the matured 
 value of the share that large speculative associations 
 could not be formed under the law. It has been most 
 fortunate for their success in that State. 3. The 
 State of Massachusetts has the most uniform scheme 
 throughout of any State, although now only about ten 
 years old. The early history of co-operative associa- 
 tions in the State, before the present law, was not 
 satisfactory. New York has one law for their forma- 
 tion as good as Massachusetts ; but its trouble lies in 
 the fact that the old law of 1851 remains unrepealed, 
 and admits of all sorts of schemes. 4. There is at the 
 present time a " boom " in these associations through- 
 out a large part of the United States. They are at- 
 tracting attention everywhere, and, as a factor in co- 
 operation among wage-earners and the encouragement 
 of savings, they are fast becoming the most prominent 
 and influential. The amount of savings already paid 
 into them in the form of dues in many States exceeds 
 the deposits in savings-banks. 
 
 The total number in the United States, January 1, 
 1889, will not be far from four thousand. To speak 
 of the total number of shares outstanding, or the total 
 
GROWTH AND SPREAD. 69 
 
 number of shareholders, or the total accumulations in 
 these associations throughout the whole country, would 
 be mere guess-work, and we will not enter upon it. 
 We earnestly hope that the next census will include 
 statistics of these associations, when we may hope for 
 reliable data concerning them as a whole throughout 
 the country. 
 
CHAPTER V. 
 
 A REVIEW OF THE DEVELOPMENT OF THE SCHEMES 
 UPON WHICH CO-OPERATIVE SAVINGS AND LOAN 
 ASSOCIATIONS HAVE BEEN AND ARE NOW CON- 
 DUCTED. 
 
 IT is our aim in this chapter to present a review of 
 the advancement made in the manner of conducting 
 the class of associations under discussion. This calls 
 for an examination of various schemes which have 
 been and are now in operation, and the reasons that 
 have led to their development from the simple build- 
 ing association. We can not refer to all the modifi- 
 cations that have arisen in the various schemes. It is 
 the principal schemes, and the more important modi- 
 fications, that we shall discuss. We will first refer to 
 the manner of issuing 
 
 Stock, 
 
 In the primitive building associations of Philadel- 
 phia, there was but a single series of stock issued ; 
 every person taking shares of stock, subsequent to the 
 date of the first issue of shares, was obliged to pay back 
 dues in order to be in the same position he would have 
 been had he taken his stock at the date of the first 
 
REVIEW OF THE DEVELOPMENT. 71 
 
 issue ; so that each shareholder paid the same amount 
 per share into the association regardless of the time 
 when he took his shares. The money was loaned only 
 to shareholders. Inasmuch as only one series of stock 
 was issued the lifetime of the association was limited 
 to the time that it took for the shares to reach their 
 matured value. This scheme necessarily involved the 
 condition that every shareholder remaining in the 
 association at the time the stock matured must be a 
 borrower to the amount of the matured value of shares 
 held by him. Let us make this clear. Suppose the 
 charter of the association limited the number of shares 
 it could issue to five hundred, and that during its life- 
 time it had issued that number. After the payment 
 of its running expenses, the funds received could be 
 used for only two purposes, namely, the making of 
 loans to its own members and paying shareholders who 
 withdrew. Suppose that, of the five hundred shares 
 issued, three hundred had been withdrawn, leaving two 
 hundred outstanding when attaining their matured 
 value. Assume the shares were $200 each at their ma- 
 tured value. Now two hundred shares at $200 each, is 
 $40,000. Before the shares can be matured, the asso- 
 ciation must have $40,000 of assets. The assets con- 
 sist of the money due from the shareholders to the 
 association upon loans. As no shareholder can borrow 
 a larger sum than the matured value of the shares held 
 by him, it follows that no shareholder can owe the 
 association for borrowed money a larger sum than the 
 association will owe him when his shares of stock have 
 matured ; therefore, each shareholder must owe the 
 association a sum equal to that which the association 
 will owe him upon his matured shares. The only limi- 
 
72 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 tation or exception to this statement of the case will 
 arise in reference to the dues paid at the last meeting. 
 The amount of those dues will not have been borrowed 
 and will be due to some shareholder or shareholders 
 in excess of the amount owing by him or them to the 
 association. 
 
 But as the association progresses from year to year 
 towards the maturity of its stock, it might not happen 
 that there are shareholders who desired to borrow. 
 What then ? It would not do to have the dues paid 
 in from month to month remain uninvested ; no profits 
 would accrue, and the result would be unsatisfactory. 
 Under the scheme of a single series, the association 
 has the power to compel shareholders to borrow the 
 funds. They are called forced loans ; and their arti- 
 cles of association and by-laws determine who should 
 become the borrower when there are no shareholders 
 wishing to borrow. 
 
 This scheme is known as the terminating plan. It 
 involves three serious defects which it was very desir- 
 able to obviate, namely, the dissolution of the associa- 
 tion when the stock matured ; the large amount of 
 back dues which the new stockholder would have to pay 
 who took stock after the association had been running 
 for some time, and, lastly, the making of forced 
 loans that is, compelling the shareholder to become 
 a borrower, whether he wanted to do so or not. 
 
 To overcome these defects, the serial scheme was 
 developed. Under this scheme, a new series of stock 
 was issued at the beginning of each fiscal year, or half- 
 yearly. In some instances series have been issued 
 quarterly, and even of tener. 
 
 This is known as the serial plan. This change in 
 
REVIEW OF THE DEVELOPMENT. 73 
 
 the scheme obviated two of the defects in the single- 
 series scheme. It permitted the association to become 
 perpetual, and it furnished a new series of stock so 
 often that one taking stock at any time in the current 
 series did not have a large amount of back dues to pay 
 to place him in the same situation that he would have 
 been had he taken his shares at the first. As a matter 
 of practical experience, the serial plan also obviates, 
 except in rare cases, the third defect. It permits of 
 the accession of new stockholders, who become such 
 for the express purpose of becoming borrowers. In the 
 single-series scheme, when an association had become 
 two or more years old, the amount of back dues that 
 they would have to pay on their stock in order to be- 
 come shareholders, so that they might become borrow- 
 ers, was a serious obstacle ; while under the serial plan, 
 the amount was not large at any time. In a well-man- 
 aged association, having the confidence of the com- 
 munity, there is usually no difficulty in finding those 
 who wish to borrow the funds. But the scheme pro- 
 vides a mode to obviate an accumulation of funds that 
 can not be loaned by providing a mode for compelling 
 withdrawals. In the serial scheme it is deemed advis- 
 able, when a series matures, to have but comparatively 
 few outstanding free shares. 
 
 Hence, it is deemed a wise policy to encourage 
 withdrawals in series approaching maturity. This is 
 accomplished by increasing the percentage of profits 
 which the withdrawing shareholder is allowed as the 
 series approaches its maturity. 
 
 In addition to this policy, many associations have 
 provided that the withdrawal of stock may be com- 
 pelled after a series has attained a certain number of 
 6 
 
74: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 years. In the case of a compulsory withdrawal, the 
 shareholder is allowed all the profits. The scheme of 
 the Massachusetts co-operative banks has this pro- 
 vision, the number of years being placed at four or 
 more. The scheme of the New York co-operative 
 savings and loan associations has the same provision, 
 and places the age of the series at four years or more. 
 
 While it is wise to thus provide a mode for com- 
 pelling withdrawals, if necessity requires it, to prevent 
 the accumulation of uninvested funds, there will sel- 
 dom be occasion for an association to avail itself of the 
 provision. 
 
 The single-series, or terminating plan, has been al- 
 most wholly abandoned in localities where these asso- 
 ciations have been in operation long. Most of those 
 that remain in such localities were formed years ago, 
 and have not had time to run their course to a natural 
 dissolution by the maturing of their stock. 
 
 In some cases where an association is formed upon 
 the serial plan, each series has been conducted sepa- 
 rately, as though it was the only series of stock the 
 association had outstanding, thereby making, in effect, 
 as many terminating associations running under one 
 management as there are series issued. This cumber- 
 some mode of conducting the business has arisen from 
 the fact that those who organized and conducted the 
 association did not fully comprehend the proper mode 
 of conducting the business in cases where all the series 
 are run together, forming, in effect, a partnership. 
 
 There is still another scheme, which has assumed 
 the name of the permanent plan. Under this scheme, 
 stock is issued at any time when there is a demand 
 for it. The largest association in the State of New 
 
REVIEW OF THE DEVELOPMENT. 75 
 
 York, the Homestead Fund Association of Rochester, 
 and the largest in the State of Ohio, the Mutual Home 
 and Savings Association of Dayton, issue their stock 
 upon this scheme. The latter association is one of the 
 oldest, most successful, and largest associations in the 
 United States. This scheme no more deserves the 
 name " permanent plan," than the serial plan, as both 
 make the existence of the association perpetual. The 
 associations above named provide in their scheme for 
 paying cash dividends upon matured stock. The Day- 
 ton company also allows the face of a share to be paid 
 at one payment, and issues thereupon " paid-up stock " 
 upon which it pays dividends 
 
 These are features which do not belong to the true 
 co-operative savings and building-loan associations. 
 Especially is this true of the feature of issuing paid-up 
 stock. This plan allows the capitalist to make invest- 
 ments in its stock in the same manner that he would 
 invest in the stock of any corporation for the purpose 
 of deriving profits from the dividends declared. This 
 is not allowed in States where a well-drawn statute has 
 been enacted to regulate the business of loan asso- 
 ciations. 
 
 Matured Value of Stock. 
 
 In both the terminating and permanent plans there 
 have been various modifications as to the matured value 
 of the shares. In the first building association the 
 Oxford Provident Building Association, in Phila- 
 delphia the matured value of the shares, we have 
 seen, was $500. The third one formed the Frank- 
 lin Building Association placed the matured value 
 of shares at $200. This has been a very common 
 " matured value " throughout the United States ; but 
 
76 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 associations have been formed in which the matured 
 value has been placed at $10, $50, $100, $105, $250, 
 $300, $500, and even $1,000. There has been and is 
 now great diversity as to the matured value of shares. 
 
 Amount and Payment of Dues 
 
 Both the terminating and permanent plans admit 
 of many modifications in the amount and payment of 
 dues, and many have been developed. We have already 
 noted, in Chapter IV, that the dues in the Oxford 
 Provident Building Association were three dollars a 
 month on each share, and that the new association that 
 succeeded it upon its dissolution placed the monthly 
 dues at the same, and that the Franklin, organized 
 in 1845, placed its dues at one dollar a month on each 
 share. A very common rate of dues has been and is 
 now, in all forms of these associations, one dollar a 
 month on each share. 
 
 In order to provide for smaller savings than one 
 dollar, many associations have been formed providing 
 for weekly dues of twenty-five cents on each share ; 
 and when the matured value of a share has been fixed 
 at ten dollars, monthly dues have been placed at five 
 cents a share. 
 
 Early in the history of these associations in Penn- 
 sylvania, the laws of the State fixed the matured value 
 of shares at $200, and monthly dues at one dollar a 
 month on each share. In the first building associa- 
 tion, according to our information, the monthly dues 
 were all paid on a certain evening in each month, 
 between seven and nine o'clock. At these monthly 
 meetings all the business of the association was trans- 
 acted, except the perfecting of its loans. This has 
 
REVIEW OF THE DEVELOPMENT. f? 
 
 been the most common mode as to time and manner 
 of paying dues ; but other modes have come into use 
 in many places. One has been for the association to 
 have a regular office at which the secretary or treasurer 
 could be found at certain hours, or all the time, to re- 
 ceive and receipt for dues, and they were treated as if 
 paid at the regular monthly or weekly meeting. This 
 involves greater expense in conducting the business, 
 and from this mode have developed associations much 
 unlike the true building and loan associations, although 
 classed with them. 
 
 We most earnestly indorse the mode of making the 
 dues payable once a month, and that all dues be paid 
 between certain hours, usually in the evening, to be 
 fixed by the by-laws ; and that they be received and 
 receipted for by a committee of the directors, the sec- 
 retary and treasurer assisting them if the committee 
 desire their aid. 
 
 Premiums. 
 
 There have been various modifications in the de- 
 velopment of the scheme of building associations re- 
 lating to the premium paid by the borrower. These 
 modifications have related both to the amount and the 
 time when paid. Let us inquire as to what is a pre- 
 mium? In the common language of the business 
 mart it is a bonus which the borrower pays to the asso- 
 ciation in addition to interest for his loan. Is there 
 any necessary reason, existing in the scheme, which 
 calls for the payment of any premium or bonus by the 
 borrower at all ? None whatever, beyond the question 
 of the most satisfactory and practical method of de- 
 ciding who shall borrow a certain sum of money, where 
 several, having equal right to borrow, are competing 
 
78 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 for it. What is the effect of a premium by a borrower ? 
 It increases the profits of the association and the 
 amount of the dividends to be added to the shares. 
 Who pays the sum that thus helps to swell the divi- 
 dends beyond legal interest ? The borrower, of course, 
 who pays the premium. Does the borrower get any of 
 it back ? Yes, a small part of it. How ? In the divi- 
 dends added to his shares. How great a part of it does 
 he get back ? The part that he gets back will bear the 
 same proportion to the amount paid by him that the 
 value of the shares he borrowed upon bears to the value 
 of all the shares of the association outstanding at the 
 time the next dividend is made after he pays the pre- 
 mium. Suppose all shareholders became borrowers for 
 the same amount, and paid the same amount of pre- 
 mium. What then ? Each one would receive back in 
 dividends upon his shares the full amount of premium, 
 and no injustice would be done ; all would share equally 
 in the benefits of the bonus, and each bear equally its 
 burden. 
 
 But will all shareholders become borrowers to the 
 amount of their shares ? No ; except in the single- 
 series plan, where they are compelled to borrow. In 
 the serial plan only a small part of the shareholders 
 can become borrowers. What becomes of the greater 
 part of the premium paid to the association in this 
 plan ? It inures to the benefit of the non-borrowing 
 shareholder. Do premiums work equity between the 
 non-borrower and the borrower ? Certainly not. The 
 dividends of the former are increased without bearing 
 any of the burden that increases the amount. 
 
 It is in this matter of premiums that many modi- 
 fications in the scheme of building associations have 
 
REVIEW OF THE DEVELOPMENT. 79 
 
 worked a most conspicuous inequality and injustice 
 in the benefits accruing to shareholders. They have 
 justly rendered the building and loan association in 
 some places odious. Premiums should not, we insist, 
 be charged or allowed except for one purpose. If 
 there is $2,000, or any other sum, to loan, and only 
 one shareholder that wants to borrow the sum at the 
 time it is offered for loan, he should have it without 
 one cent premium or bonus. If two or more share- 
 holders wish to borrow it, the right to loan it should 
 be sold by an open bidding per share ; and this is jus- 
 tifiable only upon the ground that in the long run it 
 will prove the most satisfactory and practicable method 
 of deciding between shareholders desiring to borrow 
 the money offered for loaning. The association should 
 discourage the bidding of large premiums. 
 
 Inequality of benefits to the shareholders is not 
 the only evil effect to be charged to the system of 
 premiums ; but some of the modifications, in fact 
 nearly all, have complicated the whole scheme, and 
 made it hard to be comprehended by the uneducated, 
 and has prevented their rapid growth and the extended 
 beneficent results that would flow from a just scheme. 
 
 The several schemes relating to the subject of pre- 
 miums may be grouped under five heads, namely, 
 " The Gross Plan," " The Net Plan," " The Install- 
 ment Plan," " The Interest Premium Plan," and The 
 New York Plan." 
 
 The four names used first in this classification are 
 familiar names in describing the schemes they desig- 
 nate. The fifth we have assigned to the plan em- 
 bodied in the New York Co-operative Savings and 
 Loan Association scheme. No better name occurs to 
 
80 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 me to use than the name of the State where it has 
 been definitely adopted by a general law. Let us first 
 examine 
 
 The Gross Plan. 
 
 We shall assume the matured value to be $200. In 
 this plan the borrower, at the time of bidding off his 
 loan, bids a certain per cent on the matured value of 
 the share, or a certain sum per share, according as the 
 scheme of the association provides. The amount thus 
 bid is deducted from the matured value, and the bor- 
 rower receives only the remainder, but gives security 
 to the association for $200 a share, and pays interest on 
 that sum. To illustrate : Suppose the successful bidder 
 at the sale of the money bids twenty-five per cent, or 
 $50 a share. He receives $150, and gives security for 
 $200 a share, and pays monthly interest at the rate of six 
 per cent per annum on $200. If he continues to pay 
 his dues and interest until his shares of stock mature, 
 the value of the shares borrowed upon equal the loan, 
 and one cancels the other. Now, the real cost of the 
 loan to the borrower will be determined by the length 
 of time it takes the shares in the series borrowed upon 
 to mature. The length of that time will be deter- 
 mined by the profits of the association, the amount of 
 which will be largely determined by the premiums 
 bid on money loaned. If all the money loaned by the 
 association obtained as high a premium as above men- 
 tioned, the share would mature in eight or nine years, 
 and the dues paid would amount to from $96 to $108 
 upon each share, the balance of the matured values of 
 the shares being made up by the profits added to the 
 shares in dividends. But suppose the borrower, in the 
 case above assumed, paid a much higher premium than 
 
REVIEW OF THE DEVELOPMENT. 81 
 
 was generally obtained at the sales of money ; then it 
 would take a correspondingly longer time for his shares 
 to mature, and he would have to continue his pay- 
 ment of dues and interest a longer time accordingly, 
 and the expenses of the loan would be increased in 
 the same proportion. 
 
 This was the plan adopted in the first building 
 associations, and in those associations there was but a 
 single series of stock. The association terminated 
 with the maturity of the shares. 
 
 As we have seen before, all shareholders remaining 
 in the association until their shares matured must 
 necessarily become borrowers to the amount of their 
 stock, less only the dues and interest paid at the meet- 
 ing when the stock matured. If all paid the same 
 premium, no serious injustice would be done ; but if 
 competition was spirited at one meeting, and a high 
 rate of premiums was given such as the $50 a share 
 assumed in the foregoing illustration and at another 
 meeting a borrower had no competition and obtained 
 his money at par, there would arise great inequality 
 in the expense of a loan, and also a consequent uncer- 
 tainty as to the length of time it would take the shares 
 of stock to mature. To limit this uncertainty and 
 prevent the borrower, at a time when there was no 
 competition, from obtaining his loan without the pay- 
 ment of a premium, the custom sprang, up of fixing 
 in the constitution or by-laws a minimum premium at 
 which the bidding for loans must start. When the 
 serial or permanent association came into existence, it 
 adopted this custom, and fixed a minimum premium 
 bid. 
 
 The first association with which the writer had an 
 
82 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 acquaintance was organized and conducted for some 
 years on the scheme of requiring a minimum premium 
 of $40 on each share. The highest sum the borrower 
 could obtain was $160 a share. 
 
 In the early days of building and loan associations, 
 as compared with these times, money commanded a 
 high interest, and the rate of six per cent per annum, 
 which the borrower paid in the association, was below 
 the legal rate ; hence, if he obtained his loan without 
 any premium, the association would not obtain legal 
 interest. It seemed eminently proper, therefore, that 
 the borrower should pay a premium of some amount. 
 
 At that time the values of real estate, as a rule, 
 were advancing in the localities where buildings were 
 being erected with money borrowed from loan associa- 
 tions, and it was felt that the non-borrower was en- 
 titled to large interest upon the money which he paid 
 into the association, and which enabled the borrower 
 to obtain his loan, and thereby be able to own his 
 home, and, while paying for it, also obtain the benefit 
 of the rise in value of his real estate. For these reasons 
 a high rate of premiums obtained in the early history 
 of the building and loan associations. 
 
 The question may well arise in the mind of the in- 
 quirer, in the event the borrower desired to repay his 
 loan before his shares attained their matured value, 
 did he have to pay the full two hundred dollars on 
 each share of his loan ? To require this of the bor- 
 rower would manifestly make the burden of the bor- 
 rower so heavy as to have a disastrous effect upon the 
 success of the whole scheme. To obviate this, a sys- 
 tem of rebates was adopted. By the law of Pennsyl- 
 vania, passed in 1859, under which thereafter building 
 
REVIEW OF THE DEVELOPMENT. 83 
 
 and loan associations were organized and incorporated 
 in that State, it was provided that a borrower repaying 
 a loan within eight years after the organization of the 
 corporation should have returned to him one eighth 
 of the premium for each of the eight years unexpired 
 at the time of such repayment. 
 
 This law evidently contemplated a single-series sys- 
 tem; but the principle is equally applicable to the 
 serial system. Instead of " organization of the corpo- 
 ration," we have only to insert within eight years after 
 the series, to which the shares borrowed upon belonged, 
 was issued, and the plan of rebates applies. 
 
 This rule contemplates the maturing of shares in 
 eight years ; and the system of rebates which it pro- 
 vides for is simply this : If the borrower has paid a 
 premium of $50 a share, as we have before assumed, 
 that premium is divided into eight parts being $6.25 
 each. If the borrower repays during the same year he 
 borrowed, he repays the $150, and $6.25 in addition, 
 namely, $156.25. If he repays during the second year, 
 he must pay $162.50, and so on, increasing $6.25 each 
 year. The same principle applies to any premium bid. 
 
 But still another question arises. Suppose the 
 shares were issued for some years before the owner 
 borrowed upon them. In the serial plan, when money 
 is offered for sale, there may be several shareholders 
 competing for the money, and the shares of stock held 
 by each have been issued in different series ; one, for 
 instance, may have just come in and taken stock in 
 the current series for the purpose of becoming a bor- 
 rower ; another one may have had and paid dues upon 
 his stock for four years. Suppose both are successful 
 bidders at $50 premium. From what we have stated 
 
84 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 above, it is clear how the rebates apply to the borrower 
 in the current series ; but as to the one holding shares 
 four years old, the above rule would not apply. As 
 to him, the rule is applied in this manner : The bor- 
 rower is allowed at the time of borrowing a rebate of 
 one eighth of the premium for each full year the series 
 has run at the time he borrows. Thus, on the $50 
 bid, if the series in which the shares were issued, upon 
 which the borrower is obtaining a loan, is over four 
 years old and less than five years, he receives $150 a 
 share and four eighths of the premium bid by him 
 so that he would receive in all $175. If the shares 
 were one year and less than two years old, the borrower 
 would receive $156.25. 
 
 The same rules we have stated apply to a system 
 based upon a scheme in which it is assumed that the 
 shares will mature in ten, or any other number of 
 years. The premium bid is divided into as many parts 
 as the scheme assumes it will take for the shares to 
 mature, and whenever a loan is repaid, a rebate is made 
 of as many of these parts of the premium as there are 
 years remaining of the time it is assumed it will take 
 the shares to mature ; and a rebate is likewise made 
 from the premium bid at the time of borrowing, of as 
 many of these parts of the premium as the shares bor- 
 rowed upon are years old. It is apparent that the 
 gross plan, with its system of rebates, complicates the 
 book-keeping of the association. 
 
 To illustrate : Take an association upon the serial 
 plan, in which it is assumed that eight years is the 
 requisite time for a share to mature, and which issues 
 a new series of stock each year. Suppose a loan is 
 made upon ten shares belonging to the current series, 
 
REVIEW OF THE DEVELOPMENT. 85 
 
 at a premium of $50 per share. A security is given to 
 the association for $2,000. This is the face value of 
 the asset. If it run until the shares borrowed upon 
 mature, $2,000 will be paid upon it ; but, if repaid the 
 same year it was given, $1,562.50 will cancel it. If 
 not paid until the next year, it will take $1,625 and 
 so on, increasing $62.50 each year until the eighth, 
 when it will take $2,000. Suppose at the close of the 
 fiscal year the association holds $20,000 of mortgages, 
 at their face value, what is their actual value ? We 
 certainly can not say their actual value exceeds a sum 
 that will cancel them if paid to the association. To 
 determine what sum will cancel them, we must ascertain 
 how much rebate each share borrowed upon in making 
 up the $20,000 of loans is entitled to be allowed on re- 
 payment. The total of such rebates deducted from 
 the $20,000 will give us their actual value ; but, to 
 ascertain the sum total of rebates, we must know the 
 amount of premium bid on each of the one hundred 
 shares borrowed upon, and the age of each of the 
 shares. From these intricacies of the system there 
 came into use the terms " apparent profits " and " act- 
 ual profits," " unearned premiums " and " earned pre- 
 miums." Assume each of the one hundred shares 
 above to have sold at a premium of $50 ; it is clear it 
 only took $15,000 of money to secure the $20,000 of 
 mortgages. Here is an apparent profit of $5,000, but, 
 as we have before seen, if all the shares borrowed upon 
 belonged to the current series, $15,625 would cancel 
 the $20,000 ; and the actual profits from the premiums 
 is only $625 instead of $5,000. Of the $5,000 of pre- 
 miums only $625 is "earned," and the remainder, 
 $4,375, is as yet "unearned." 
 
86 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 In our illustrations we have assumed the simplest 
 conditions that could arise under the rebate system. 
 Increase the mortgages to $100,000, and made in five 
 different series, and each loan paying a different pre- 
 mium, and the expert accountant will be appalled with 
 the complexity, unless he has become an expert in 
 these particular accounts, and has clearly understood 
 the difference between " earned " and " unearned " pre- 
 miums, and opened his books and kept the month at 
 basis. 
 
 One of the rocks upon which many building and 
 loan associations have run and nearly foundered has 
 been this " unearned premium." Until very recently 
 many associations opened and kept their accounts as 
 though the whole premium had been paid, and reck- 
 oned their assets in declaring their dividends at the 
 face value of their securities, instead of the " actual 
 value " ; and as the years ran by and rates of interest 
 declined, and the rate of the minimum premium had 
 to be lowered in order to obtain borrowers at all, and 
 the earlier borrowers from any cause repaid their loans, 
 the rebates which had to be allowed to them necessa- 
 rily came out of current profits, and the result was to 
 make dividends very small and greatly to damage the 
 prosperity of the association, without the shareholders, 
 as a mass, being able to clearly understand what was 
 the difficulty. This consequence was obviated by 
 keeping the books so that the securities were only 
 reckoned at their actual value ; but this was more dif- 
 ficult than many secretaries and organizers knew well 
 how to do. The gross plan, with its system of rebates, 
 is too complex for the ordinary wage- worker to readily 
 understand, or for any one, without careful study ; and 
 
REVIEW OF THE DEVELOPMENT. 87 
 
 by reason of its intricacies, and sometimes rank in- 
 equalities of benefits between borrower and non-bor- 
 rower, it has greatly retarded the growth of loan asso- 
 ciations upon simpler and more equitable schemes. 
 
 The Net Plan. 
 
 The net plan was the next to develop. Building 
 and loan associations came into existence in such great 
 numbers in Philadelphia that they necessarily had to 
 compete with each other for shareholders ; and hence 
 there was a constant tendency to modify the original 
 scheme so that the new association, with a scheme 
 changed from the older scheme, would appear to be 
 better for the borrower. The borrower could readily 
 perceive that when he was paying six per cent on $200 
 a share and had received only $150 or $160, he was in 
 fact paying seven or eight per cent for the use of his 
 money. To obviate this apparent high rate of inter- 
 est, a new scheme was devised of only charging six per 
 cent interest upon the sum actually received. The 
 security would be given to the association for the prin- 
 cipal sum of $200 a share and for the payment of in- 
 terest upon the sum which he actually received after 
 the amount of his premium bid was deducted. This 
 came to be known as the " net plan," from the fact 
 that interest was paid only upon the net sum the bor- 
 rower received. The system of premiums, with the 
 minimum bid and rebates of the gross plan, remained 
 unchanged. If the borrower was making his loan upon 
 shares in a series four years old, he was allowed four 
 eighths of the premium bid, if the association was or- 
 ganized on the basis of eight years to mature its shares. 
 If organized on the basis of nine years to reach ma- 
 
88 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 turity of shares, he was allowed four ninths of the 
 premium ; if organized on the basis of ten years, then 
 four tenths were allowed ; that is, the net sum he 
 would receive would be $200 a share, less the premium 
 bid, plus four eighths or four ninths or four tenths of 
 such premium, according to the scheme of the asso- 
 ciations. 
 
 If borrowing in the current series that is, the last 
 series issued the net sum received would be $200 a 
 share, less the total premium bid. The same rebates 
 from the face value of the security were allowed on re- 
 payment of the loan as under the gross plan. In brief, 
 the net plan varied from the gross plan only in charg- 
 ing the borrower interest on the net sum received, in- 
 stead of charging him interest on the face value of the 
 security, that being for the matured value of each 
 share borrowed upon. This scheme was better for the 
 borrower, provided he was not induced by reason of 
 the apparent advantage to him in the matter of inter- 
 est to run up the premium bid to a higher rate than 
 he would have done under the gross plan. This inter- 
 est advantage was a tempting delusion in the matter 
 of bidding high premiums. 
 
 It will be seen that the net plan involved all the 
 intricacies and complexities of the gross plan. It was 
 an improvement to the borrower who understood the 
 plan fully, and was not induced thereby to bid a higher 
 premium than he would otherwise have bid; but to 
 the unthinking it often proved a delusion and a snare. 
 
 The Installment Plan. 
 
 The third plan evolved in the history of building 
 and loan associations relating to premiums is known 
 
REVIEW OF THE DEVELOPMENT. 89 
 
 as the "installment plan." Associations organized 
 and conducting their business under the installment 
 plan are subject to two classifications. In the first the 
 borrower bids a premium in the same manner as under 
 the gross and net plan; but instead of the whole 
 amount of the premium bid being deducted from the 
 matured value of the share, and he receiving upon his 
 loan only the balance, the premium bid is divided into 
 as many parts or installments as the scheme of the 
 association assumes that it will take months for the 
 shares to mature; and the borrower at each payment 
 of his dues and interest pays one of these installments 
 of the premium bid by him. Under this arrangement, 
 the borrower receives $200 a share upon his loan, or 
 whatever sum constitutes the matured value of the 
 shares, and pays interest upon that sum and gives a 
 security to the association for the payment of the 
 principal sum, and, in addition thereto, for the pay- 
 ment of the installments of premium, with his dues 
 and interest. Thus, if a borrower in the current series 
 should bid a premium of $50 a share, $200 being 
 their matured value, and the scheme of the association 
 assumes that nine years are required for the shares to 
 mature, the $50 premium would be divided into one 
 hundred and eight installments, of which one part 
 would be paid with each payment of dues and interest. 
 If the association assumes that it would take ten years 
 for its shares to mature, then the $50 would be divided 
 into one hundred and twenty parts or installments, 
 and one installment would be paid with each payment 
 of dues and interest. 
 
 This plan was a great advance upon the gross plan 
 and the net plan ; under it, the borrower received his 
 7 
 
90 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 full $200 a share, and he could readily determine how 
 much the installment of premium for every month 
 increased his rate of interest paid for the use of the 
 money. 
 
 The second class of associations organized under 
 this plan modified the first scheme by dropping out 
 the assumption that the shares would mature in a cer- 
 tain number of months, the premium bid not being a 
 gross sum divided into installments for the purpose of 
 determining the amount of the installment to be paid 
 each month. The bid is made solely on the amount 
 that the borrower will pay each month for the use of 
 the money, in addition to the legal interest. The bor- 
 rower receives $200 a share and pays interest thereon, 
 and, in addition thereto, such sum every month as the 
 bid made by him requires. The latter form of the in- 
 stallment plan has justly become the most popular of 
 the two, and we think is now generally adopted in asso- 
 ciations throughout the country where the installment 
 plan is in operation. Under this plan the borrower 
 who wishes to repay his loan at any time before his 
 shares of stock have matured simply pays the install- 
 ment of premium up to the time of the payment of 
 his loan. It will be observed that this plan or scheme 
 eliminates the complex system of the gross and net 
 plan with reference to rebates, and very much simpli- 
 fies the account-keeping of the association, and also 
 simplifies the whole scheme of the association to such 
 a degree that it can be readily understood by men of 
 ordinary intelligence. 
 
 The second form of the installment plan was the 
 one adopted by the law of Massachusetts, providing 
 for the incorporation of what is now known as the 
 
REVIEW OF THE DEVELOPMENT. 91 
 
 " co-operative banks " of the State of Massachusetts ; 
 and, so far as we are advised, is the plan generally 
 pursued by associations in St. Paul, Minneapolis, and 
 Philadelphia. 
 
 Premium Interest Plan. 
 
 The fourth plan or scheme relating to premiums, 
 which has developed in recent years to some extent 
 and is gaining ground in some localities, is the " pre- 
 mium interest plan." This plan was incorporated 
 into the Massachusetts scheme of co-operative banks 
 in 1882. That law provides that any corporation 
 organized under the act providing for the incorpora- 
 tion of co-operative banks may provide by its by-laws 
 that the bid for loans " at its stated monthly meetings 
 shall, instead of a premium, be a rate of annual inter- 
 est upon the sum desired, payable in monthly install- 
 ments. Such bids shall include the whole interest to 
 be paid at any rate not less than five per centum per 
 annum." 
 
 The original act which this amends provided for 
 that form of the installment plan in which the bid 
 was a certain per cent upon the amount loaned, pay- 
 able each month. Under the amendments referred to, 
 the co-operative banks are given the option of the in- 
 stallment plan or to confine the bidding to the rate 
 of interest to be paid by the borrower, the money to 
 be struck off to the borrower who bids the highest 
 rate of interest and furnishes satisfactory security. 
 It will be noted that under the premium interest plan 
 of Massachusetts the minimum rate of interest shall 
 not be fixed by the by-laws at less than five per cent 
 per annum. 
 
92 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Associations under the old law of the State of New 
 York may be organized upon any of the plans or 
 schemes to which we have already referred; and of 
 late some associations have been organized upon the 
 premium interest plan, the minimum rate of interest 
 being fixed at five per cent and the bidding for the 
 loans commencing at that sum. This plan of premium 
 is a great advance upon the gross plan and net plan 
 with their system of rebates ; and it is claimed by its 
 friends to be also an advance upon the installment 
 plan, as it simplifies the scheme by confining the bid- 
 ding of the premium solely to the rate of interest. 
 The borrower receives $200 per share, and pays such 
 rate of interest per month as his bids call for. 
 
 There are many things connected with this plan to 
 commend it, and its friends speak very strongly in its 
 favor. As to which of these schemes is the best we 
 shall discuss in the next chapter. 
 
 The New YorTc Premium Plan. 
 
 As we have before stated, we name the fifth plan re- 
 lating to premiums " the New York premium plan," for 
 the reason that it is the plan incorporated into the gen- 
 eral law of this State providing for the incorporation of 
 co-operative savings and loan associations. The gen- 
 eral scheme incorporated into the statute contemplates 
 that the only object or purpose of a premium being 
 paid by the borrower is to determine who shall become 
 entitled to borrow the money where there are several 
 bidding for it who are equally entitled to become bor- 
 rowers. That the selling of the money at auction to 
 the highest bidder is the most practicable manner of 
 determining who shall borrow the money, assuming, 
 
REVIEW OF THE DEVELOPMENT. 93 
 
 of course, that each borrower has ample security to 
 offer for his loan according to the requirements of the 
 scheme of the association. The borrower, at the time 
 of his bidding, clearly understands that whatever 
 premium he bids is in the nature of a bonus, and that 
 the amount that he bids is deducted from his loan 
 at the time, and he gives security to the association 
 for $200 a share, and pays interest thereon, and 
 the whole premium transaction is closed. Under this 
 system, high rates of premium will not be bid, and 
 a very large share of the loans made will pay no 
 premium at all. The general law provides that the 
 rate of interest to be paid shall be determined by the 
 by-laws of each association. The object of this pro- 
 vision is to allow associations to reduce their rates of 
 interest as the general legal rate of interest shall de- 
 cline. At present the legal rate of interest in New 
 York is six per cent ; and associations now organizing 
 under this statute fix their rate of interest at that 
 sum ; but in case the rate of interest should be placed 
 at five per cent by legislative enactments, the associa- 
 tions formed under this act could, by their by-laws, 
 change their rate of interest accordingly. Under this 
 plan the face value of the securities represents their 
 actual value, and every security held by the association 
 bears the same rate of interest. No delusions nor snares 
 are held out to the borrower to lead him to bid a high 
 premium on the ground that it will be returned to 
 him. The whole scheme of an association is simplified 
 to such a degree that it may be readily understood by 
 all. We shall further discuss the merits of this plan 
 hereafter. 
 
 We have now described the five plans relating to 
 
04 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the subject of premiums. There are various modifica- 
 tions of these several types ; but it is not our purpose 
 to enter into the discussion of them in detail. 
 
 Many associations exist which seek to be known or 
 classified as associations of the class we are discussing 
 which should not be so classified. 
 
 It is an essential feature of building and loan asso- 
 ciations, co-operative banks, and the co-operative sav- 
 ings and loan associations that each share of stock of 
 the same age, whether borrowed upon or not, shares 
 equally in the distribution of profits ; but there is a 
 class of associations where the borrower is excluded 
 from any share in the profits. As an illustration of 
 such a scheme we quote from a communication to the 
 " American Building Association News," dated at Mt. 
 Vernon, Ind., February, 1888 : 
 
 We have two associations here working on the following 
 plan : Par value of shares $100, dues payable weekly, twenty- 
 five cents per share. A fixed amount of $65 is loaned on each 
 share borrowed on and the loans run five years from date of 
 series in which loan is made ; $65 you will notice is the 
 amount returned to the association in dues during a period of 
 five years. The borrowing members pay 6 per cent weekly 
 with their dues on the net amount of loan ; for example, a loan 
 of ten shares, $650, the interest for the first year at 6 per cent 
 is $39 ; the second year interest on $520, $31.20 ; third year 
 interest on $390, $23.40 ; fourth year interest $15.60 ; fifth 
 year interest $7.80 ; no premium is paid by the borrower, 
 and each series of stock is liquidated at the end of five years 
 from the time of issue. The borrowers have their mortgages 
 cancelled, and the non-borrowers receive the net amount of 
 profits or losses, as the case may be, up to that time on each 
 share held, including dues paid on the same. 
 
REVIEW OF THE DEVELOPMENT. Q5 
 
 An association of this nature could not be con- 
 ducted under the laws of Pennsylvania, Massachusetts, 
 or New York. 
 
 Another scheme for associations usually classed as 
 building and loan associations, but improperly so, al- 
 lows the shareholders to pay a gross sum at the begin- 
 ning of a series, in lieu of monthly or weekly dues, 
 which invested at a certain rate of interest will amount 
 to the matured value of a share in the association in a 
 certain number of years, the time which the association 
 assumes that it will take the stock in the series in 
 which the shares are issued to mature. 
 
 An association of this kind is speculative and in 
 conflict with the true object and spirit of building and 
 loan associations. All features of speculation should 
 be eliminated from these associations, so far as possi- 
 ble, in order to make them continuously popular and 
 successful. The capital of all associations should con- 
 sist of the monthly or weekly savings of its members, 
 with profits derived therefrom in loaning to its own 
 members or shareholders. Much injury has come to 
 the fame of the true co-operative associations for sav- 
 ings and home-building by schemes that assume their 
 name and many of the forms of doing business, but 
 which are in reality only schemes by which the money- 
 lender obtains large interest from the borrower. They 
 should be discouraged by every friend of true co-opera- 
 tion among wage-earners. 
 
CHAPTER VI. 
 
 WHICH OF THE SEVERAL SCHEMES CONSIDERED IS 
 BEST. 
 
 WE have now before us a general outline of the 
 several schemes upon which the class of associations 
 under discussion have been and are now conducted. 
 
 We have seen something of their history and de- 
 velopment. The literature on the subject is very mea- 
 ger, and hence the field of our investigation has been 
 limited. We have passed over without describing many 
 modifications of several schemes which do not appear 
 to have assumed sufficient importance to merit a sep- 
 arate classification and name. We have sufficient data 
 before us, however, from which some safe conclusions 
 may be derived. 
 
 Before proceeding to describe in detail how to or- 
 ganize these associations, the details of management, 
 and the proper methods for keeping the books of ac- 
 count, let us examine which of the several schemes or 
 their modifications presented seems to be the best. 
 
 That scheme is undoubtedly the best which secures 
 an equality of benefits between the borrower and non- 
 borrower, simplicity in its practical workings, and 
 safety in the highest degree. These three essential 
 requisites must exist in any scheme to become de- 
 servedly popular. 
 
THE BEST SCHEME. 97 
 
 Safety of the Scheme. 
 
 All the schemes we have described have the essen- 
 tial requisite of safety in nearly the same degree. 
 They all require, as a rule, the same kind of security 
 for their loans, namely, first bond and mortgage, or a 
 pledge of their own stock upon which there has been 
 paid into the association a sum equal to the amount 
 loaned and six months' interest on the loan. The 
 latter gives to the association absolute security, as we 
 have seen; all risk upon the loan is, in fact, elimi- 
 nated. 
 
 The safety of loans made upon bond and mortgage 
 depends in all the schemes on the same conditions. 
 These conditions may be briefly stated as follows : 1. 
 The good judgment, experience, and integrity of those 
 who examine and appraise the value of the real estate 
 offered to the associations as a security for loans. 2. 
 The knowledge and accuracy of those charged with 
 examining titles and making abstracts of the same. 
 3. The percentage of margin which is required be- 
 tween the value of the mortgaged premises and the 
 amount loaned. 4. The condition of the real-estate 
 market, when the loan is made, as to whether it is 
 normal, inflated, or depressed. 5. In those loans 
 where the fire insurance upon the buildings is a part 
 of the security relied upon, the watchfulness of the 
 officer, whose duty it is to see that the insurance does 
 not expire and leave the building without insurance ; 
 and carefulness in selecting companies to carry risks 
 that are able and willing to pay in case of loss. 
 
 All the foregoing conditions of safety may be ful- 
 filled under any scheme, either carefully or negligent- 
 
98 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 ly, intelligently or ignorantly, honestly or dishonestly. 
 The intelligence and character of the officers whom the 
 shareholders select to conduct the affairs of the asso- 
 ciation are of first importance always ; and no scheme 
 can relieve the shareholders from the greatest care in 
 this selection. The most that any scheme can do is to 
 provide all the elements of safety possible. 
 
 Receiving Dues, Interest, and Fines. 
 
 We have seen that two modes are pursued in re- 
 ceiving dues, interest, and fines. 
 
 The first is for the board of directors, or a com- 
 mittee thereof, to hold regular stated meetings, weekly 
 or monthly, according to the scheme of the association,- 
 for the receipt of dues, interest, and fines, and of install- 
 ments of premium .when the scheme is upon that plan. 
 No officer has the right, on behalf of the association, 
 to receive payments from the shareholders at any other 
 time. 
 
 The second mode is to require the payments to be 
 made to the secretary or treasurer, or permit them to 
 be made at any time during the week or month at the 
 office of the association, the officer, in order to accom- 
 modate the shareholder, having regular office-hours for 
 the purpose. 
 
 Of these two modes, it is proper here to inquire 
 which is best. It is manifest that if the receiving of 
 dues, interest, fines, etc., is devolved upon a single 
 officer, such as the secretary, and he has an office, and 
 is to be found there during business hours, and also at 
 stated times in the evening, it gives to each stockhold- 
 er the advantage of selecting his own time during the 
 week or month, according to his convenience, for mak- 
 
THE BEST SCHEME. 99 
 
 ing his payments; and again, it is clear that if an 
 association is prosperous and increases the number of 
 its shareholders without any limitation, they may be- 
 come so numerous that there will not be sufficient time 
 at an evening meeting for any committee to receive 
 and receipt for all the payments then due. In such 
 cases a regular officer, located in an office for the re- 
 ceiving of dues, interest, fines, etc., becomes a neces- 
 sity. 
 
 The answer to the question raised will be made 
 differently by different persons, according to their con- 
 ception of the true mission of loan associations. For 
 myself, I do not believe that the shareholders of any 
 association should be permitted to become so numer- 
 ous that payments can not be handled in a single even- 
 ing by the proper committee. For, a single officer to 
 receive the dues at any time must inevitably tend to 
 centralize the running of the association in the hands 
 of that officer. It is with him that all the stockhold- 
 ers become acquainted, and not with the other officers 
 to the same extent; nor do they become acquainted 
 with one another. They go and pay their dues when 
 convenient, and then go about their business. It be- 
 comes to them much like depositing in a bank. It 
 necessarily involves additional expenses in conducting 
 the business, while it leaves a door wide open for de- 
 falcations and ring methods in the management of the 
 association. 
 
 On the other hand, the stated meeting for the pay- 
 ment of dues and the receipt thereof by a proper com- 
 mittee tends to bring all the stockholders together at 
 regular intervals. They meet one another and all the 
 board of directors. When it is not convenient to at- 
 
100 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 tend a meeting the money and pass-book can be sent 
 by some friend. By this means all become better 
 acquainted with the scheme of the association, and 
 more interested in the manner in which its business 
 is conducted. When the sales of money immediately 
 follow the receipt of dues many persons will remain to 
 attend the sales. If there is a slack demand by bor- 
 rowers the interest of shareholders will be aroused in 
 looking about among their friends for those who wish 
 to borrow, and soliciting them to join the association, 
 explaining to them its workings and the benefits to be 
 derived from joining it. Under such conditions the 
 association becomes an educator. 
 
 These are some of the reasons which lead us to 
 prefer the stated meeting for the receipt of dues ; and 
 we believe its wisdom is completely established by the 
 fact that in those localities where that method has 
 been most commonly followed loan associations have 
 attained their greatest success. There is an element 
 of safety in it which can not be obtained under the 
 other mode. 
 
 Weekly or Monthly Dues. 
 
 An examination of loan associations through the 
 country will show the fact that weekly dues are most 
 often associated with the scheme of a single officer re- 
 ceiving the dues. There are classes in some localities 
 with whom weekly dues are advantageous, but in most 
 instances the monthly scheme answers every end. 
 
 Simplicity of the Scheme. 
 
 Of two or more schemes, each having the essential 
 requisites of securing an equality of benefits between 
 the borrower and non-borrower, and safety in sub- 
 
THE BEST SCHEME. 101 
 
 stantially the same degree, that scheme is best which 
 is least complex in its practical workings. These asso- 
 ciations are intended for the 'wage- earning classes ; for 
 men of moderate means, men whose business expe- 
 rience is not large or varied, and hence the scheme 
 adopted should be one that can be readily understood 
 by them. The issuing of stock and the payment of 
 one dollar dues on each share until it arrives at the 
 value of $200 is a simple arrangement. In case of a 
 withdrawal, the giving of a thirty days' notice and re- 
 ceiving back the dues paid and a certain percentage of 
 the profits which have accrued, is a simple proceeding 
 that all can understand. The loaning of money at 
 each meeting to the highest bidder is easily under- 
 stood, when the premium bid is treated as, and under- 
 stood to be, a bonus, and the borrower receives $200 a 
 share less the premium per share he has bid, and gives 
 a security for the $200 and pays interest monthly at 6 
 per cent or any other rate fixed by the association, 
 and continues to pay his dues until the shares are ma- 
 tured and one cancels the other or if he repay his 
 loan, before the shares mature and the amount to pay 
 is the sum he has given security for, the whole pro- 
 ceeding is simple and straightforward: The book- 
 keeping in cases like this is simple, and a stockholder 
 or auditing committee can easily at any time arrive at 
 the condition of the association. 
 
 But change this form of premium to a system 
 whereby it is assumed that it will take ten years for 
 the shares to mature, and then divide the premium 
 into ten parts, and deduct them all from the amount 
 of money the borrower receives, if he is borrowing 
 upon shares in the current series, and require him to 
 
102 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 give a security for the full $200 a share and pay inter- 
 est on that sum, and tell him that if he wishes to re- 
 pay his loan before the shares borrowed upon mature 
 the association will allow a rebate on the premium bid 
 of as many tenth parts of the same as there are full years 
 remaining out of said ten years at the time he repays 
 the loan, the whole proceeding becomes complex, and 
 can not be comprehended in its full effect without a 
 study more difficult and patient than the average arti- 
 san will give it. Such is the gross plan, with its 
 system of rebates. It is complex beyond ordinary 
 comprehension, and complicates the accounts of the 
 association to such a degree that an ordinary business 
 man, when placed upon an auditing committee can 
 not verify the accuracy of the annual statement with- 
 out greater labor than he can or will bestow upon it. 
 
 It does not relieve the complexity by adopting the 
 net plan the only change in this being that the bor- 
 rower pays interest on the actual sum which he re- 
 ceives. This, in fact, still further complicates an 
 examination of the accounts. Before an auditing com- 
 mittee can determine whether John Doe, a borrower, 
 is paying or has paid the amount of interest he ought 
 to pay, they must ascertain the amount of premium he 
 bid on his loan, and deduct that from $200 to ascertain 
 the amount upon which he should pay interest ; and 
 not only that, but they must ascertain how old the 
 series was when he borrowed, so that they may deter- 
 mine the amount of rebate he had on the premium 
 bid. This must be done with reference to every loan 
 outstanding. 
 
 This complication is somewhat relieved under the 
 installment plan, in which the borrower receives the 
 
THE BEST SCHEME. 103 
 
 full sum of $200, and pays the premium in monthly 
 installments, with his dues and interest ; but it still 
 remains complicated. It involves the examination as 
 to the amount of premium bid upon each loan, in 
 order to determine whether the installment actually 
 paid is the right one. 
 
 The fourth plan, which is regarded with much 
 favor in many localities, and especially in the co-opera- 
 tive bank scheme of Massachusetts, where the pre- 
 mium bid may be, if the association so elects, upon 
 rate of interest to be paid for the loan, is subject to 
 the same objection as the installment plan. To deter- 
 mine the amount of interest which ought to be paid, 
 the amount of interest bid on each loan must be ascer- 
 tained. 
 
 Many associations in New York, under the old law, 
 adopted the policy of fixing a low rate of interest as 
 the minimum, and then borrowers bid up the rate in 
 the competition for money. There are many things 
 to commend premium - interest bidding, but this 
 scheme is at the expense of simplicity in the practical 
 workings of the business of the association. As re- 
 gards the essential requisite of simplicity in the prac- 
 tical workings of the associations, it seems clear that 
 the scheme of the co-operative savings and loan asso- 
 ciations of New York is superior to any other. 
 
 Equality of Benefits. 
 
 Equality of benefits between the borrower and the 
 non-borrower must be secured in these associations to 
 justly entitle them to the name of co-operative asso- 
 ciations. 
 
 If the scheme upon which they are conducted in- 
 
104 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 volves the fleecing of the borrower by the free share- 
 holder the one who does not borrow they cease to 
 be what is claimed for them. The effect in the stimu- 
 lation of savings and in furnishing facilities therefor, 
 in encouraging home-building, and making the attain- 
 ment of a home possible to the wage-worker, has been 
 so great that these associations have been almost uni- 
 formly successful, accomplishing much good, notwith- 
 standing considerable injustice involved in the prac- 
 tical workings of the system between borrower and 
 non-borrower the former paying a very large interest 
 and the latter receiving it. The borrower too often 
 undertakes obligations which he does not fully com- 
 prehend until it is too late for him to recede, and if 
 he attempts to free himself from the burden he only 
 still further swells the profits of those who do not 
 borrow. 
 
 We shall assume that the scheme which has the 
 essential elements of simplicity in its practical work- 
 ings and safety, and, at the same time, secures the 
 greatest equality between the borrower and the free 
 shareholder, is the best. We assume this, because it 
 seems to us to admit of no dispute. 
 
 The total sources of profits of an association arise 
 from premiums, interest, fines, entrance - fees, and 
 transfer-fees. If, perchance, in the course of its busi- 
 ness in the enforcement of securities upon defaulted 
 loans, it becomes the owner of real estate, rents re- 
 ceived, as well as any advance realized upon its resale 
 above actual costs to the association, belong to profits. 
 But these are chance profits ; they are not the sources 
 from which, under the ordinary workings of the 
 scheme, profits are expected to be realized, so we shall 
 
THE BEST SCHEME. 1Q5 
 
 not refer to them again, but shall leave the enumera- 
 tion above to stand, with one addition thereto while 
 the sources above enumerated constitute all the sources 
 from which the business of the association derives 
 gain, as between the stockholders, there is yet another 
 source of profit, and an important one. 
 
 We have, in Chapter III, fully explained the dif- 
 ference between the holding value and the withdraw- 
 ing value of shares. Now, whenever a shareholder 
 withdraws he leaves in the treasury of the association 
 the difference between these two values, which inures 
 to the benefit of the shareholders who do not with- 
 draw, and constitutes a portion of the profits to be 
 divided at the next distribution. 
 
 The necessary expenses of conducting the business 
 of an association will, as a rule, exceed the sum re- 
 ceived from entrance-fees, transfer-fees, and fines, so 
 that the amount of profits to be divided at each distri- 
 bution will not exceed the sum received since the last 
 distribution from premiums and interest and profits 
 left by withdrawing shareholders. 
 
 Now let us cast out of these items the premium 
 paid, and assume that the interest paid is simply the 
 legal rate. It is manifest that the borrower and non- 
 borrower are receiving equal benefits. The borrower 
 pays his monthly interest, and has value received, in 
 return therefor, in the loan that has been made to 
 him. The non-borrower, who is availing himself of 
 the association as a place to accumulate his savings, is 
 obtaining better advantages than he can obtain else- 
 where, when he is able to secure the legal rate of in- 
 terest upon his savings paid in from month to month. 
 
 The borrower obtains the advantages of being able 
 8 
 
106 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 to pay interest in small sums from month to month, 
 and likewise monthly payments in addition as dues 
 upon his stock, which in time shall wipe out his loan. 
 This secures equality between the borrower and non- 
 borrower, and both reap a benefit without loss to the 
 other. The distribution of interest and the profits left 
 by the withdrawing shareholder, in the form of divi- 
 dends to the holding value of the respective shares 
 held by the borrower and non-borrower, is just, and 
 works equity between all parties concerned ; but it is 
 otherwise with the item of premiums. 
 
 If all borrowers bid the same premium and the 
 premium received by the association was distributed 
 among the shares borrowed upon, then there would be 
 an equality of benefits ; but such is not the scheme. 
 Premiums, as well as other items of profits, are bunched 
 and divided among all the shares outstanding accord- 
 ing to their holding value. 
 
 It needs no array of figures to show that when the 
 free shareholder receives 10 per cent interest on his 
 savings in a community where the legal rate is but 6, 
 that the borrower has paid either in premium or inter- 
 est far above the current rate. We have in Chapter 
 IV written to some extent on this question. It is in- 
 evitable that if the association is one in which free 
 shareholders obtain large interest it is one in which 
 the borrower will pay large interest, either under the 
 name of interest or premiums. 
 
 It may be of service in the consideration of this 
 subject to obtain some correct notion of the relative 
 number of borrowers and non-borrowers in these asso- 
 ciations. 
 
 At the date of the annual report for 1886 of the 
 
THE BEST SCHEME. 1Q7 
 
 Savings-Bank Commissioners of Massachusetts, there 
 were forty co-operative banks in that State, having 
 14,805 shareholders ; of this number only 2,960 were 
 borrowers. There were outstanding 98,783 shares of 
 stock ; but, unfortunately, the fact is not compiled as 
 to the number of shares borrowed upon. From an ex- 
 amination of the report of the " Bureau of Statistics of 
 Labor and Industries " of New Jersey for 1886, where- 
 in they have tabulated certain facts with reference to 
 156 building and loan associations in that State, we 
 find the total number of shareholders 37,730, of which 
 only 8,562 are borrowers. The total number of shares 
 outstanding is 204,653, of which only 42,373 have 
 been borrowed upon. 
 
 There is located at Elmira, New York, an associa- 
 tion organized upon the serial plan : Matured value of 
 shares, $200 ; monthly dues, one dollar ; issuing a new 
 series of stock each year, and has matured three series 
 of stock. It now issues and matures a series each 
 year. Its thirteenth annual report shows outstanding 
 3,510 shares in all series, of which 812 have been bor- 
 rowed upon. 
 
 From our investigation and from the necessity of 
 the scheme of these associations, we conclude that the 
 ratio of non-borrowers to borrowers will, on the aver- 
 age, exceed four to one. 
 
 From this it follows that excessive interest and pre- 
 miums paid by the borrowers may be divided into four 
 parts at least, and only one of these parts will be re- 
 turned to the borrowers in dividends to their stock 
 while the remaining three parts will be divided to the 
 free shares. While this conclusion is not accurate, it 
 is approximately so. 
 
108 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 We feel it needs no argument to prove that the old 
 gross plan, requiring a premium bid of $25 a share, or 
 even more, and payment of interest on $200 while the 
 most the borrower could receive on his loan was $175 
 a share worked rank injustice. 
 
 The first association in which the writer was a 
 shareholder required a minimum premium bid of $40 a 
 share. The promise was held out to the borrower that 
 he would get his premium back in dividends upon his 
 shares. We have seen that he would not get back 
 more than one fourth of it. The free shareholders 
 received the other three fourths. Under this system 
 the free shareholder who remained until his shares 
 matured would receive from 12 to 18 per cent interest. 
 
 The system could not prosper except in localities 
 in which real estate was rapidly advancing, and the 
 borrower obtained an advantage from the advanced 
 value of the real estate he was paying for. 
 
 As we have before stated in the last chapter, the 
 net plan relieved somewhat the rank inequality of 
 this system. While excessive interest was not re- 
 quired, the large premiums still remained. This in 
 turn yielded to the installment plan. In this the bor- 
 rower obtained and paid interest on $200, but with 
 each monthly payment was an installment of premium. 
 Under either plan, whatever premium he did pay, not 
 over one fourth came back to him. The free share- 
 holders obtained the lion's share. 
 
 We have before spoken of a modification of these 
 schemes that placed the interest paid from month to 
 month at less than legal interest. This system proves 
 but a delusion and a snare to the borrower. In addi- 
 tion to the fact, which was always fallacious, that he 
 
THE BEST SCHEME. 109 
 
 would get his premium back in dividends upon his 
 shares, he was shown that he was obtaining a low rate 
 of interest, and that he could afford to bid a high 
 premium. Under these conditions, and the stimulus 
 of an open competitive bidding, the premium would be 
 run up until the borrower paid an excessive sum in 
 premium and interest for his loan. Such are the dan- 
 gers attendant upon this scheme. 
 
 The fourth plan, the premium interest plan, is 
 free from this evil where the minimum rate of in- 
 terest is placed at the legal rate. The only objection 
 we urge to this scheme is the want of simplicity that 
 we have before discussed, and the further fact that it 
 is liable to breed dissatisfaction to have borrowers year 
 after year paying different rates of interest on the 
 same sum of money. 
 
 But whenever in this scheme the minimum rate of 
 interest is placed below the legal rate, -there still re- 
 main the conditions before stated which prove a delu- 
 sion and often a snare to the borrower, and it is also 
 open to the objection of being wanting in simplicity. 
 It has some advantages that are urged in its favor that 
 should be noticed. The advocates claim for it the 
 advantage ol adapting itself to the fluctuation in the 
 money market. When money is plenty, the borrower 
 may obtain his loan below legal interest. When money 
 is scarce, he will have to pay more, and that it is 
 equitable that he should do so. There is some force 
 in this claim ; but in some of its bearings it is falla- 
 cious. If the borrower only continued to pay the 
 higher interest while the increased demand for money 
 continued, or the low rate while the demand was 
 small, then the claim would have greater force ; but 
 
HO CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 he continues to pay the high or low rate of interest 
 so long as he continues his loan. If he has obtained 
 a low rate, he will not change it. If he has been 
 compelled to pay a high rate to obtain the loan, he 
 will be watching for an opportunity to pay off the 
 loan and obtain a new one at a lower rate. But when 
 the scheme requires a uniform rate of interest and the 
 premium bid is understood to be a bonus to be paid at 
 the time, the amount of that bonus will be controlled 
 by the condition of the money market. If money is 
 plenty, he will not pay a high bonus ; he will usually 
 get it without the payment of any; but if the de- 
 mand for money is greater than the supply, he will 
 have to pay a bonus accordingly. The increased or 
 decreased premium, upon this scheme, therefore more 
 accurately and equitably adjusts itself to the money 
 market than the high or low rate of interest in the 
 interest premium plan. 
 
 Loans in small sums, to be repaid in driblets, as 
 loans are made in these associations, can not as a rule 
 be made elsewhere. The rate of interest upon loans 
 of this character are not subject to much fluctuation 
 from the legal rate. The borrower will always be 
 willing to pay legal interest when coupled with the 
 other advantages offered him. 
 
 We, therefore, prefer the plan of the co-operative 
 savings and loan associations of New York. Pre- 
 mium should not enter into any scheme for the sake 
 of profits, but simply as a mode of deciding who shall 
 have the money. It should be understood to be a 
 bonus, and when bid, that not more than one fourth 
 is coming back to the borrower. When money is 
 plenty, no bonus will be bid. 
 
THE BEST SCHEME. 
 
 Before me lies the reports of the association at El- 
 mira, New York, before mentioned, for the years of 
 1886 and 1887. It loaned for the fiscal year ending 
 in February, 1886, $40,750; rate of interest 6 per 
 cent, and the total premiums paid, $62. 
 
 For the fiscal year ending in February, 1887, it 
 loaned $53,400, and the total premium was $232.45 ; 
 and the report of both years states that the demand 
 for loans during the year exceeded the amount of 
 money the association had to loan. 
 
 It may be urged that this system admits of high 
 bidding by the borrower, and excessive interest result- 
 ing therefrom. That is true ; so does any system yet 
 devised ; but it holds out no false or delusive incen- 
 tives to rash bidding. The borrower understands he 
 is bidding a bonus ; and understanding this, he will 
 not bid high and in the practical workings it will 
 be very seldom that any premium will be bid at all. 
 
 We have not discussed in this chapter the merits 
 of the terminating plan, as compared with the perma- 
 nent plans for issuing stock, for the reason that we 
 assume it will be conceded by all that either of the 
 permanent plans are superior to the terminating plan. 
 
 "We prefer the serial plan to the plan of issuing 
 stock at any time. The only object of issuing at any 
 time is to allow persons to become shareholders with- 
 out paying back dues. This is sufficiently obviated in 
 the issuing of a series once in six months. Under 
 this plan, any stockholder ascertaining the number of 
 shares outstanding in each of the series can determine 
 very closely at any time the amount of the accumu- 
 lated capital of the association. We prefer it for its 
 simplicity ; and it is the plan generally adopted wher- 
 
112 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 ever these associations have been carefully regulated 
 by the laws of the State. 
 
 Voting by the Stockholders. 
 
 There are two modes of voting. The first is to 
 allow the stockholder to cast one vote and only one, 
 whether he holds one or twenty shares of stock. The 
 second is to allow him to cast one vote for each share 
 of stock held by him. The advocates of the one-vote 
 system claim that it prevents a few stockholders hold- 
 ing large blocks of stock from combining to control 
 the association. This is true ; but, on the other hand, 
 it allows ten men holding one share apiece to have the 
 same voting power of ten men holding ten shares 
 apiece. The limitation of ten free shares in any one 
 series is a sufficient check upon the attempt of a few 
 to control its policy. We believe each stockholder 
 should be allowed to cast a vote equal to his interest 
 in the association, to the extent of casting one vote for 
 each share of stock held by him. If no limitation 
 were placed upon the number of shares a stockholder 
 might hold, we would agree with the one- vote plan ; 
 but we prefer to place the limitation in the holding of 
 shares, and then each share have a vote. 
 
 In conclusion, then, we express our preference for 
 the scheme which issues its stock in series, matured 
 value $200, monthly dues of one dollar, money loaned 
 without a premium when there is no competition and 
 when competition occurs, the premium bid being 
 treated as a bonus and deducted from the loan ; inter- 
 est at 6 per cent, payable monthly. Hence we ap- 
 prove, in the main, the scheme of the co-operative 
 savings and loan associations of New York. 
 
CHAPTER VII. 
 
 HOW TO ORGANIZE A CO-OPEEATIVE SAVINGS AND 
 LOAN ASSOCIATION UNDER THE NEW YORK ACT 
 OF 1887. 
 
 IT is our purpose to explain, first, in detail, how to 
 organize a co-operative savings and loan association 
 under the general act for their incorporation, passed 
 by the Legislature of the State of New York in 1887. 
 The act itself will be found in the Appendix. 
 
 The first section of this act provides : " That any 
 fifteen or more persons, being of full age, may form 
 an association as provided within this act. All asso- 
 ciations formed under the provisions hereof shall be 
 known as co-operative savings and loan associations, 
 and the name of every association so formed shall con- 
 tain, as a part thereof, the words, ' co-operative sav- 
 ings and loan association.' " 
 
 The first step therefore is to find fifteen or more 
 persons of full age who will unite to form an associa- 
 tion. The only condition which the statute provides 
 for membership is one of age. 
 
 Any person desirous of forming a loan association 
 in his own locality should prepare a paper in language 
 substantially as follows : 
 
114 CO-OPERATIVE SAYINGS AND LOAN ASSOCIATIONS. 
 
 " The undersigned, being of full age, hereby ex- 
 press a desire to unite in the formation of a co-opera- 
 tive savings and loan association under the provisions 
 of the act for their incorporation known as Chapter 
 556 of the laws of 1887 of the State of New York, 
 and upon the due incorporation of said association 
 and the adoption of by-laws, we hereby severally agree 
 to take the number of shares of stock in said associa- 
 tion set opposite our respective names." 
 
 Below the written matter the paper should be ruled 
 and headed as follows : 
 
 NAME. 
 
 RESIDENCE. 
 
 No. OF SHARES. 
 
 
 
 
 
 
 
 The paper being thus prepared, it is ready for sign- 
 ing by those who will join in the formation of the 
 association. 
 
 While only fifteen are necessary for the formation 
 of an association, it is well to obtain as many more as 
 possible. The greater the number who will join in 
 the organization the greater will be the interest in the 
 enterprise in the community, and a larger issue of 
 stock will be secured at the first meeting for issuing 
 the same. 
 
 The question will arise as to how large a commu- 
 nity should be to undertake to conduct an association 
 successfully. Any business center having a popula- 
 tion of five hundred can maintain one of these associa- 
 tions ; and it will be especially adapted to the wants 
 of the community if a large element of the popula- 
 tion belongs to the wage-earning classes. 
 
ORGANIZING UNDER NEW YORK ACT OF 188Y. 115 
 
 The requisite number having been obtained to join 
 in the formation of an association, the next step is in- 
 corporation. 
 
 Section 3 of the statute provides that " said as- 
 sociation shall become incorporated by the said fifteen 
 or more persons making, signing, and acknowledging, 
 in the manner and form prescribed for the acknowl- 
 edgement of deeds in this State, a certificate wherein 
 shall be stated the name of said association ; that the 
 association is formed under and for the purposes pre- 
 scribed in this act ; the town, village, or city where 
 the association is located within this State ; and the 
 limit of the number of shares of stock it shall have 
 outstanding at any one time. 
 
 " When made as aforesaid, said certificate shall be 
 filed and recorded in the office of the Secretary of 
 State, and upon said certificate being so filed and re- 
 corded the Secretary of State shall issue a certificate 
 in proper and suitable form, declaring the facts con- 
 tained in said original certificate, and the filing and 
 recording thereof in his office, and which latter cer- 
 tificate shall thereupon be recorded in the county 
 clerk's office of the county where said association is 
 located ; and, upon the same being so recorded, the 
 persons named in the certificate first above mentioned, 
 their associates and successors, shall become a corpo- 
 rate body." 
 
 The procedure for incorporation is thus clearly 
 pointed out in this section of the statute. 
 
 The drafting of the certificate is the first thing to 
 be done. The law enumerates the facts which it must 
 contain. 1. The name of the association. If no 
 common understanding has come to pass as to what 
 
116 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the name shall be, this can be left blank, except the 
 part which the law prescribes must appear in the name 
 of every association, viz. : " co-operative savings and 
 loan association." The completion of the name need 
 not be determined until a meeting is called for that 
 purpose, and to execute the certificate. In deciding 
 upon a name it is well to identify the locality of the 
 association by the name adopted, as " The Albany Co- 
 operative Savings and Loan Association " ; or, if the 
 association is organized by a special class, as " The Al- 
 bany Kailway Co-operative Savings and Loan Associa- 
 tion," or "The Albany Clerks' Co-operative Savings 
 and Loan Association," etc. 
 
 2. The statement that the association is formed 
 under and for the purposes prescribed in Chapter 556 
 of the laws of New York for 1887, entitled an act 
 " providing for the formation of co-operative savings 
 and loan associations " ; and in the event such act has 
 been amended at the time of the making of the cer- 
 tificate, there should be added, " and the acts amenda- 
 tory thereof." 
 
 3. The name of the town, village, or city where the 
 association is located. 
 
 4. The limit of the number of shares of stock the 
 association shall have outstanding at any time. 
 
 Section 5 of the act provides, " that the total num- 
 ber of shares outstanding at any time shall not exceed 
 ten thousand." This fixes the maximum limit. 
 
 We perceive no advantage to be gained by fixing 
 the limit at a less number, except it arise out of the 
 laws relating to taxation. As the laws stand at this 
 writing in the State of New York, no advantage is 
 gained in that direction. These associations are " in- 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. H7 
 
 stitutions for savings," and therefore not liable under 
 the general corporation tax act, and are especially ex- 
 empted from the provisions of Chapter 143 of the laws 
 of 1886, which is an act taxing the privilege of organ- 
 izing a corporation. 
 
 However, outside of cities, it will rarely occur that 
 an association will wish to have more than five thou- 
 sand shares outstanding at one time, and in small vil- 
 lages they will seldom exceed three thousand shares. 
 We suggest the following as a form for the certificate 
 of incorporation : 
 
 This memorandum certificate of incorporation, 
 
 made this day of , 18 . . , certifies that we, 
 
 [here insert names], being of full age, have agreed to 
 unite, and do hereby unite, to form a co-operative 
 savings and loan association, as follows, to wit : 
 
 1. Said association is formed under the provisions 
 and for the purposes prescribed in Chapter 556 of the 
 laws of 1887 of the State of New York, and any acts 
 amendatory thereof. 
 
 2. The name of the association is The [insert name] 
 Co-operative Savings and Loan Association. 
 
 3. The said association is formed to conduct the 
 business thereof in the [town, village, or city] of 
 [name], in the State of New York. 
 
 4. The number of shares of stock which said asso- 
 ciation shall have outstanding at any one time shall 
 not exceed the number of 
 
 We ask that the Secretary of State of the State of 
 New York shall file and record this certificate in pur- 
 suance of the provisions of section 3 of said Chapter 
 556 of the laws of 1887. 
 
118 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 In witness whereof, we have hereunto set our hands 
 and seals the day and year first above written. 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 (seal) (seal) 
 
 etc. etc. 
 
 State of New York, \ 
 
 County of ) 
 
 On this .... day of : ., 18. ., personally ap- 
 peared before me the undersigned, a notary public in 
 and for said county [insert names of all who signed 
 above], to me personally known to be the same persons 
 who signed the foregoing certificate of incorporation 
 and severally duly acknowledged that they executed 
 the same. 
 
 ss. 
 
 Notary Public. 
 
 Execution of the Certificate. 
 
 A meeting of those who have agreed to unite in 
 the organization should be called at some convenient 
 hour and place, at which time the name of the associa- 
 tion should be decided upon, if it has not been before, 
 and, upon the same being inserted in the certificate, 
 all should sign their full names, and a seal should be 
 affixed opposite each name. A notary public should 
 be in attendance and take the acknowledgments of the 
 signers as to a deed. 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. H9 
 
 While together, the members should designate some 
 three of their number as a committee to call the next 
 meeting of the incorporators, which will occur after 
 the incorporation has been completed, and such com- 
 mittee should also be directed to prepare by-laws for 
 the consideration of the incorporators. 
 
 The certificate should be next taken to the county 
 clerk for his certificate, to be annexed as to the official 
 acts of the notary who has taken the acknowledgment. 
 The paper is then ready to be forwarded to the Secre- 
 tary of State, to be filed and recorded. 
 
 With it should be sent the amount the Secretary of 
 State is entitled to for filing and recording it and is- 
 suing the certificate, which said third section provides 
 he shall issue, to be recorded in the county clerk's 
 office. 
 
 Unless the Secretary of State shall prescribe a dif- 
 ferent form for use by him, we suggest the following 
 as a form for such certificate, and that it be sent with 
 the original certificate to the Secretary of State, so 
 that all he will have to do is to execute and return the 
 same. We hope these associations will become so gen- 
 eral that the Secretary of State will prepare and have 
 printed a certificate that shall to some extent be artist- 
 ic, as it will constitute the charter of the association 
 when the memoranda of the county clerk showing 
 that it has been recorded in his office has been in- 
 dorsed upon it. 
 
 FORM OF CERTIFICATE ISSUED BY SECRETARY OF STATE. 
 
 To all whom it may concern : 
 
 This instrument duly certifies that [insert names 
 of those who executed certificate filed and recorded in 
 
120 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 his office], have duly filed in this office, and the same 
 has been duly recorded, a certificate for the purpose of 
 incorporation, under the provisions and for the pur- 
 poses prescribed in Chapter 556 of the laws of 1887, 
 and any acts amendatory thereof, providing for the 
 formation of co-operative savings and loan associations. 
 
 That the certificate so filed and recorded duly sets 
 forth that the name of such association is " The 
 Co-operative Savings and Loan Association." 
 
 That such association is formed under the provis- 
 ions and for the purposes prescribed in Chapter 556 
 of the laws of 1887, and any acts amendatory thereof. 
 
 That such association is located in the of 
 
 , in the County of , in the State of New 
 
 York. 
 
 That the capital stock of said association outstand- 
 ing at any time shall not exceed thousand 
 
 shares, and upon the recording hereof in the county 
 
 clerk's office of the county of in this State, the 
 
 incorporation of said association will be complete. 
 
 In witness whereof, I have hereunto set my 
 hand and affixed my official seal at the city of 
 Albany, in the State of New York, on this 
 
 day of , in the year of our Lord 
 
 one thousand eight hundred and eighty- 
 
 Secretary of State. 
 
 Upon the receipt of this certificate from the Secre- 
 tary of State, it should be forthwith recorded in the 
 county clerk's office of the county mentioned in the 
 certificate ; and upon being so recorded, the incorpo- 
 ration of the association will be complete. 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 121 
 
 By-Laws. 
 
 The next step in completing the organization is 
 the framing and adoption of by-laws. 
 
 Section 17 of the statute provides that : " The asso- 
 ciation as soon as duly incorporated shall possess 
 power to adopt by-laws, not inconsistent with the pro- 
 visions of this act, regulating the due conduct of the 
 business of the association, defining the duties of the 
 officers and committees, times of meetings, mode of 
 determining and declaring the withdrawing value of 
 shares, and in relation to all other matters having ref- 
 erence to the conduct of the business, although not 
 specifically mentioned in this act." 
 
 In the case of building and loan associations in 
 this State, formed under the provisions of Chapter 122 
 of the laws of 1851, it is necessary to have what was 
 termed, " articles of association." In familiar speech 
 these are called the " constitution " of the association, 
 and are filed in the office of the county clerk, as a part 
 of the steps to become incorporated. 
 
 Under the act of 1887 this is not required. The 
 act itself constitutes the constitution. 
 
 The reason of this is clear when we consider that 
 the provisions of the act of 1851 admitted of great 
 variety in the schemes upon which associations could 
 be conducted, and the particular plan or scheme of the 
 association was outlined in the articles of association ; 
 while under the act of 1887, but one general scheme 
 is allowed, and that is definitely outlined in the act 
 itself. 
 
 But the act of 1887 allows of minor variations in 
 
 the details of the scheme, and these are to be described 
 9 
 
122 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 in the by-laws. There will be found in the Appendix 
 a complete set of by-laws as a form. 
 
 We shall here discuss only such portions of them as 
 seem necessary to give those seeking to organize an asso- 
 ciation a clear understanding of what the by-laws should 
 contain, the reasons therefor, and the duties of officers 
 thereunder. 
 
 Officers. 
 
 Section 4 of the act provides that : " The officers 
 of the association shall consist of a president, vice- 
 president, treasurer, and secretary, who shall be ex- 
 officio members of the board of directors, which shall 
 consist of nine members, exclusive of said ex-officio 
 members. Other officers may be authorized by the by- 
 laws. 
 
 " The duties and compensation of the officers, their 
 terms of office, the time of their election, and the time 
 of periodical meetings of the officers and shareholders, 
 shall be determined by the by-laws, except that the 
 board of directors shall determine each year the com- 
 pensation of the secretary and treasurer." 
 
 Term of Office. 
 
 Under the terms of this section, the by-laws will 
 determine the length of time for which officers may be 
 chosen. We think no question will arise as to the term 
 of office of the president, vice-president, treasurer, 
 and secretary. The term of one year is so universal 
 that no one would suggest otherwise. The term should 
 be for one year. It is easy to re-elect a good officer, 
 and it is the easiest mode to get rid of an inefficient 
 one by electing some one else. 
 
 As to the nine members of the board of directors, 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 123 
 
 there may arise a difference of opinion. It may be 
 claimed that it would be unwise to elect a full board 
 each year ; that it would admit of bringing in an en- 
 tirely new body of men, who would not have the ex- 
 perience that those who had served upon the board 
 would have, and that it would be better to elect for 
 three years, thereby making it possible to bring in 
 only three new men each year. On the other hand, 
 that mode allows of the possibility of a ring being 
 formed in the board; or, if an inefficient member 
 has been elected, he can not well be got rid of under 
 three years. We believe the best method is to elect all 
 annually ; you can re-elect the good members and drop 
 those who have not been satisfactory, either in their 
 conduct of business or in inattention to their duties. 
 There can not be a change unless the owners of a ma- 
 jority of the shares outstanding desire it, and that is 
 not likely to occur unless there is good ground for the 
 change. The usual course is to continue from year to 
 year the board of directors with few changes. This 
 has been the practice in building and loan associa- 
 tions generally. We therefore recommend that the 
 by-laws prescribe for the annual election of all officers, 
 and that all officers shall hold office until removed or 
 their successors qualify. 
 
 Should it be determined to adopt a three years' 
 term of office for directors, then the by-laws should 
 provide for a casting of lots among the nine directors 
 elected at the organization, in order to determine who 
 should hold office for the term of one year, who for 
 two years, and who for three years ; and provide that 
 at each annual election thereafter there shall be three 
 directors elected for the term of three years. 
 
124 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 The by-laws should also prescribe in what manner 
 a vacancy occurring in the board of directors or oth- 
 er officers shall be filled, until the next annual elec- 
 tion. This may be done by a special meeting of the 
 shareholders held for such purpose, or by the board of 
 directors. "We recommend the latter course as being 
 the simplest, and not involving the expense attending 
 the calling of a meeting. It is unnecessary to discuss 
 here the ordinary duties of the several officers. These 
 will be expressed in general terms in the by-laws. The 
 form which we give contains such provisions as we 
 deem proper. (See Appendix.) 
 
 Treasurer. 
 
 The treasurer must give bonds in such sum as the 
 board of directors prescribe. These bonds should be 
 twice the amount of any sum of money which it is 
 anticipated will be in his hands at any one time dur- 
 ing the year. We recommend at least two sureties, 
 and one at least should not be connected with the bank 
 where the treasurer deposits his money. The reason 
 of this last provision is, that in case the bank fails 
 both sureties will not be involved. 
 
 The president and secretary should sign the certifi- 
 cates of stock and all orders for money drawn upon 
 the treasurer. They should have no authority to issue 
 an order upon the treasurer, except in pursuance of an 
 order of the board of directors, except in the case of 
 loans ; and as to these orders, the by-laws should pro- 
 vide that an order should not be issued until the 
 securities have been approved by the committee and 
 attorney who have to pass upon their sufficiency; and, 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 125 
 
 in case of real-estate security, the mortgage has been 
 left with the county clerk for record. 
 
 The by-laws should provide that every order drawn 
 should be dated when drawn, and specify the purpose 
 for which made and the name of the payee. 
 
 The Secretary. 
 
 It is unnecessary to discuss here the duties of the 
 secretary in keeping the books of account or what 
 books he should keep. We refer the reader to the 
 ninth chapter, where the matter is fully treated. 
 
 At each stated monthly meeting of the board it is 
 desirable to have a report from the secretary showing 
 the number of shares outstanding, the number bor- 
 rowed upon, the receipts of the last meeting, and the 
 balance of cash on hand. A form for this report may 
 be made which can be used through the fiscal year. 
 Any member of the board desiring to keep fully in- 
 formed on the details from month to month, can do so 
 by having one of the forms for this report, and making 
 himself, or have the secretary make for him, the en- 
 tries from month to month. Many other items of in- 
 formation may be embodied in this monthly report. 
 It need not be entered in the minutes. Its object is to 
 give the members of the board full information from 
 month to month, and in such form that v with experi- 
 ence, they will be enabled to so keep track of the de- 
 tails of the association that they can detect at once any 
 departure by the secretary, or treasurer, or president 
 from strict adherence to the by-laws. For a form for 
 such monthly report see Appendix. 
 
 The annual report of the secretary should be a full 
 and complete report of the transactions of the year, 
 
126 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS, 
 
 showing the total receipts in detail, so that the amount 
 received from each source of income will clearly ap- 
 pear, as well as the total disbursements, and the pur- 
 poses for which they were made. This report should 
 be printed, and distributed to stockholders before or at 
 the beginning of the annual meeting. For a form for 
 such report see Appendix. 
 
 Accompanying the report, the president may make 
 any review of the business of the year, and any sugges- 
 tions or recommendations which seem to him wise. 
 In this connection it is proper to refer to the manifest 
 importance of having a good secretary. He should be 
 a fair accountant at least, and thoroughly post himself 
 at the outset of his work. It is simple work to keep 
 the accounts if a proper system is adopted ; but if an 
 inadequate system is adopted in the beginning it will 
 complicate and lead to tangles in after years that will 
 prove very annoying, involving much labor and vexa- 
 tion. He should comprehend fully the scheme upon 
 which the association is based, and be able to explain 
 it to others ; he should at all times be affable, and 
 cheerfully explain, to all who ask him, questions about 
 the workings of the association. The details of the 
 work done are largely under his care. There must be 
 absolute accuracy in all his entries, and promptness in 
 doing his work. Under the law, only he and the treas- 
 urer can receive compensation for their services, and 
 usually the pay of the treasurer is nominal. The sec- 
 retary should receive a sum that pays him fairly for 
 the work done. 
 
 In many places where the old building and loan 
 associations have flourished, and are now flourishing, 
 one man will be secretary of two or more associations ; 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 127 
 
 and under such arrangement he is able to devote his 
 entire time to their work. The same thing occurs 
 under the co-operative bank scheme of Massachusetts ; 
 and there is no objection, in cities that can maintain 
 several associations, to the same thing being done un- 
 der the recent law of New York, or wherever that 
 scheme may be adopted. 
 
 Finance Committee. 
 
 The nine members of the board of directors should 
 be divided into three finance committees, each commit- 
 tee serving for the term of four months. This com- 
 mittee will have charge of the receipts of dues, inter- 
 est, and fines, and must pass upon the sufficiency of 
 securities offered for loans. Its duties are important. 
 In the matter of receiving dues, etc., the by-laws should 
 give it the right to call upon the secretary and treas- 
 urer to aid them. In passing upon securities, it will 
 receive the assistance of the attorney; the duties of 
 the latter, however, being confined to the examination 
 of abstracts of title furnished by the borrowers from 
 the county clerk, the drawing of the bonds and mort- 
 gages, and, when the loan is finally passed, seeing that 
 the mortgages are at once recorded in the proper 
 clerk's office. 
 
 The detail of passing upon securities is as follows : 
 At the time the borrower bids off his loan, he should 
 describe upon suitable blanks, furnished by the asso- 
 ciation, the real estate offered as a security, or, in case 
 of a " stock loan," the shares of stock of the asso- 
 ciation. The loans proposed to be secured by stock 
 can be disposed of by the whole board at once if de- 
 sired. The secretary would be able to inform the 
 
128 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 board whether the borrower owned the stock which he 
 proposed as a security, and the withdrawal value of 
 the same ; but if no one asked for an immediate con- 
 sideration of a stock loan, the descriptions of proposed 
 securities would be handed to the finance committee. 
 The by-laws should prescribe the time when the com- 
 mittee shall meet, following each stated meeting, to 
 pass upon securities. Before the time of such meeting 
 arrives, each member of the committee should examine 
 with care the real estate proposed, and appraise its fair 
 market value. In making this appraisal there should 
 be exercised great caution and intelligent judgment. 
 The following conditions should be carefully ascer- 
 tained and noted : Is the tendency of value of real 
 estate where the property is situated upward or down- 
 ward ? Is its present value speculative or substantial ? 
 Is it the result of a " boom," or of an undue depres- 
 sion ? Is its particular location one where property is 
 liable to advance or decline in value ? Is it vacant, or 
 built upon ? If built upon, what is the character of the 
 buildings ? Are they well or cheaply constructed ? 
 And what is their rental value, and the class of ten- 
 ants which occupy them ? If not, are they to be occu- 
 pied by the borrower as a home ? And, lastly, what 
 are the antecedents and habits of the borrower, his 
 ability, and prospects of securing a steady income to 
 meet his dues and interest ? All these questions enter 
 into the examination of real estate offered as a security, 
 and should have weight in accepting or rejecting the 
 proposed security for a loan. Each member of the 
 committee having thus examined the property and 
 made his appraisal is prepared to vote intelligently 
 when assembled to pass on the loan. 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 129 
 
 In determining whether the security offered for 
 the loan is sufficient, the question arises, What per- 
 centage of value shall be loaned ? Here two courses 
 are open under the law of New York. A maximum 
 limit may be fixed by the by-laws, as seventy-five per 
 cent ; or it may be left wholly to the discretion of the 
 committee. My own conviction, arrived at after much 
 experience, is that the safest way is to leave the respon- 
 sibility wholly with the committee, the guiding rule 
 being that a sufficient margin should be required be- 
 tween the value and the amount loaned to make the 
 loan safe under all reasonable probabilities. There is 
 no way of escaping the fact that the association must 
 rely upon the good judgment and integrity of its com- 
 mittee. If the committee is corrupt or visionary as to 
 the value, no by-law can restrain or- guide it. To evade 
 the by-laws, when the percentage to be loaned is fixed, 
 it is only necessary to appraise the value sufficient to 
 bring the case within the letter of the by-law. It is 
 better to place the responsibility of making a good 
 loan squarely upon the committee, without any fetters 
 save those dictated by a sound judgment and a cau- 
 tious prudence. If the committee on consultation ap- 
 prove the security offered, then the attorney takes 
 charge of seeing that the title is good, and of the prep- 
 aration of the necessary papers to perfect the loan. The 
 by-laws may allow the attorney to make the abstract 
 of title or require the borrower to produce to the at- 
 torney an abstract from the county clerk which the 
 attorney shall examine and pass upon. 
 
 We prefer the latter course, under the laws of the 
 State of New York. If the attorney finds the title 
 satisfactory, he will prepare the bond and mortgage 
 
130 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 and have them executed, together with an assignment 
 of the shares of stock borrowed upon, and leave the 
 mortgage at the clerk's office for record. If any in- 
 surance is required by the terms of the mortgage, 
 this should be procured, whereupon the order for the 
 loan will be drawn and delivered to the borrower. All 
 securities, except the mortgage, should be passed by 
 the attorney at once to the secretary, who will obtain 
 the mortgage from the clerk's office as soon as re- 
 corded, make the proper entries in the security book, 
 and then turn over the same to the treasurer in whose 
 custody they will remain. The charges of the attor- 
 ney for his services must be paid by the borrower. 
 The amount may be left to his discretion, or the by- 
 laws may empower the board of directors to fix a 
 schedule of rates. 
 
 Meetings. 
 
 The by-laws should fix the times for all the regu- 
 lar meetings of the shareholders and of the board of 
 directors. The first annual meeting of the sharehold- 
 ers will naturally occur soon after the last stated 
 monthly meeting in the fiscal year, for the receipt of 
 dues, sufficient time being allowed after the monthly 
 meeting to permit the officers to get their books prop- 
 erly balanced up and the annual reports prepared. 
 
 In fixing the time of the monthly meeting for the 
 receipt of dues, etc., the question presented is, at what 
 time in the month will the wage earners as a general 
 rule be best able to pay their dues and interest? 
 "When do they usually receive their pay ? In railroad 
 centers the time should be fixed after the monthly 
 pay-day. Attention at the beginning to this question 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 131 
 
 will often enable men to become shareholders who 
 would not if the monthly meeting was before " pay- 
 day," and will prevent the trouble of amendments of 
 the by-laws to meet these conditions after the associa- 
 tion has been formed and begun operations. The 
 manner of calling special meetings of the shareholders 
 and of the board of directors will be provided in the 
 by-laws. 
 
 Withdrawals. 
 
 Section 7 of the general act of incorporation, 
 among other things, provides that, " The withdrawing 
 shareholder shall be paid the amount of the withdraw- 
 ing value of his accumulations as determined under 
 the by-laws at the last distribution of profits before 
 the notice of withdrawal, together with all dues paid 
 since such distribution, and such interest on the value 
 of the shares at the time of the last distribution and 
 on the dues thereafter paid, as the by-laws shall deter- 
 mine." 
 
 From a reading of the section it will appear that it 
 makes full provisions as to the manner of giving no- 
 tice of withdrawal, and when the amount of the with- 
 drawal shall be paid. It is left to the by-laws to deter- 
 mine the manner in which the withdrawal value shall 
 be determined. The questions that arise for consid- 
 eration in forming the by-laws upon this subject may 
 be stated as follows : 
 
 1. Shall the withdrawing shareholder be allowed 
 all the profits that have accumulated upon arM been 
 added to his shares in the form of dividends, or, only 
 a part of such profits ? 
 
 2. If he is not to be allowed all the profits, what 
 part shall be retained ? 
 
132 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 3. If a part is retained, shall it be a uniform per- 
 centage, applying to all withdrawals regardless of the 
 age of the shares when withdrawn ? 
 
 4. Shall the part retained by the association be 
 arranged upon a plan whereby, as the share advances 
 toward maturity, a smaller percentage shall be re- 
 tained ? 
 
 5. If the latter course is adopted, shall the by-laws 
 fix the amount for each year that a series has run? 
 
 Or, Lastly : Shall the whole matter be devolved 
 upon the board of directors, for them to determine 
 the withdrawal value in each series, to remain in full 
 force until the next distribution and another declara- 
 tion of withdrawing values ? 
 
 If the withdrawing shareholder is allowed all the 
 profits which have been added to the dues paid into 
 the association, the by-laws would simply so declare, 
 and fix the rate of interest to be allowed upon the 
 value of the shares, as determined at the last distribu- 
 tion and upon the dues paid in since that time. 
 
 If the association should deem it wise to have the 
 association retain a uniform percentage of the profits 
 from the withdrawing shareholder, regardless of the 
 age when withdrawn, the by-laws would name the per- 
 centage to be retained, and determine the rate of in- 
 terest to be allowed as above since the last distribution 
 of profits. 
 
 If, however, it is deemed best to adjust the rate of 
 percentage retained according to the age of the series 
 when the share is withdrawn, allowing a larger share 
 of the profits as the share advances toward maturity, 
 and at the same time it is thought best to fix the rate 
 by the by-laws, the amount to be retained during each 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 133 
 
 year of the progress of a share to its maturity must be 
 named, together with the rate of interest to be allowed 
 on the value of the share at the time of the last distri- 
 bution, and upon dues thereafter paid until the with- 
 drawal. 
 
 If, however, the whole matter of determining what 
 shall be paid upon withdrawals falls upon the board 
 of directors, then the times of declaring such with- 
 drawal value by the board should be appointed, to- 
 gether with any limitations as to rates of interest that 
 may seem desirable. 
 
 In the history of building and loan associations it 
 has been the usual custom to retain from the with- 
 drawing shareholder a part of the profits. We deem it 
 proper and prudent to do so. There is possibility of 
 loss upon loans that have been made while the with- 
 drawing shareholder was a member, after he has with- 
 drawn. If he takes out all the profits that have ac- 
 crued up to the last distribution before his withdrawal, 
 the remaining shareholders take the burden of all the 
 risks thereafter upon loans from which the withdraw- 
 ing shareholder has received his full share of profits. 
 For this reason it seems just to retain from the with- 
 drawing shareholder, a share of the accrued profits. 
 
 But we observe under the Massachusetts co-opera- 
 tive bank scheme that some of the associations, or 
 co-operative banks, as they are now called, allow to 
 the withdrawing shareholder all the accrued profits; 
 but the greater number retain one fourth ; some re- 
 tain one tenth, while others grade the amount retained 
 according to the age of the share when withdrawn. 
 We believe it the wisest course to leave the whole sub- 
 ject to the board of directors. It is advisable beyond 
 
134: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 question, it seems to me, to encourage withdrawals in 
 series nearing maturity by allowing a larger percentage 
 of profits to be withdrawn. 
 
 When a large number of free shares remain in a 
 series at the time it matures, they call for a large 
 amount of money; and it will take so long to pay 
 them off that discontent is often produced among the 
 holders of the shares. It has always been the policy 
 of building and loan associations to encourage with- 
 drawals in series approaching maturity. When dis- 
 cretionary power is lodged in the board, they can 
 stimulate withdrawals from series wherein a large 
 number of free shares remain, by increasing the share 
 of profits allowed to be withdrawn. On the other 
 hand, it may be urged with force that when the per- 
 centage of profits allowed to be withdrawn is fixed in 
 the by-laws, all know from the outset just what share 
 they will be allowed on withdrawing. It is possible 
 that our bias in favor of leaving the subject of with- 
 drawal values with the board, to be fixed at each dis- 
 tribution, arises from the fact that such is the plan 
 under which the writer has had his practical experi- 
 ence. We should not quarrel with any one who dis- 
 agrees with us. 
 
 Fines and Entrance Fees. 
 
 In section 6 of the general act is the following : 
 " The association shall have power to impose and 
 collect a fine, not exceeding 10 per cent for each 
 month in arrears, for every dollar of dues or interest 
 which a shareholder shall refuse or neglect to pay at 
 the time it is due. They shall also have power to 
 charge an entrance fee of not exceeding twenty-five 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 135 
 
 cents on every share of stock issued by the associa- 
 tion." 
 
 It is most desirable that all dues and interest should 
 be paid promptly at the designated time each month. 
 Promptness is a good business habit to cultivate. To 
 insure this promptness it is very beneficial to provide 
 for a money penalty in case of failure. In most cases 
 where there is a failure to pay at the appointed time 
 it is the result of f orgetf ulness. Now, there is nothing 
 that is so efficacious in overcoming forgetfulness as to 
 make it cost money. Hence it has been almost a uni- 
 versal feature in associations of this kind to attach a 
 fine to each failure to pay dues and interest at the time 
 fixed for such payment. 
 
 The association formed under the act in question, 
 by its laws determines the amount of the fine to the 
 maximum sum of 10 per cent. It can not fix a 
 larger sum, but it may a smaller. We believe 10 per 
 cent is none too large. Yet many associations place 
 it at a less per cent. An entrance fee may be placed 
 at a less sum than twenty-five cents a share, but in our 
 judgment twenty-five cents is the best sum. It helps 
 out in the necessary expenses of the association, and 
 is not felt by the shareholder. The same is true of 
 the transfer fee. 
 
 Annual and Semi-annual Series. 
 
 The general act allows a new series to be issued 
 annually or semi-annually. We prefer the annual 
 series. The only advantage of the semi-annual series 
 is that the new stockholder can come in at any time 
 without paying so much of back dues. But where 
 there is an annual series there will be no serious ob- 
 
136 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 stacle in that direction. The new series will be issued 
 at the first meeting after the annual distribution of 
 profits. It is simpler than the semi-annual series, and 
 that is most desirable. 
 
 We have now discussed quite at length matters in 
 which the general act allows of variations in the 
 scheme of associations formed under it, and which are 
 to be defined and regulated by the by-laws. It has 
 been our aim to aid in framing the by-laws. In the 
 form of by-laws found in the Appendix we have fol- 
 lowed the scheme which we deem wisest ; but they 
 can be readily modified for any scheme allowed by the 
 general act. The three cardinal principles to be kept 
 always in view are safety, equality, and simplicity. 
 
 Adoption of By-laws and Election of Officers. 
 
 The committee appointed to frame the by-laws 
 being in readiness to report, a meeting of the incor- 
 porators should be called to adopt by-laws and elect 
 officers. It is wise to give a general notice of this 
 meeting, inviting all who may wish to learn about the 
 workings of the scheme to be present. The explana- 
 tions given by the committee in making their report, 
 and the discussions that are likely to arise, will aid 
 much i$ giving a clear idea to those in attendance of 
 the beneficent objects of the association, and may in- 
 duce many to become shareholders at the first meeting 
 for issuing stock. The by-laws will fix the first meet- 
 ing for issuing stock and paying dues. Sufficient time 
 should elapse between the meeting when officers are 
 elected and the meeting for issuing stock and paying 
 dues, to permit of the by-laws being printed. There 
 
ORGANIZING UNDER NEW YORK ACT OF 1887. 137 
 
 should be adopted at the meeting for the election of 
 officers a form of seal for the association. 
 
 Passbooks and Certificates of Stock. 
 
 The certificates of stock should be nicely printed 
 on good paper, in two colors of ink, with such adorn- 
 ments as may be practicable where the printing is 
 done. As a suggestion for a form, see form in Ap- 
 pendix. They must be signed by the president and 
 secretary, and also bear the imprint of the seal of the 
 association. There will be issued to every shareholder 
 at the time he receives his stock a passbook. For 
 suggestion as to the form and manner of preparing 
 passbook, see Appendix. 
 
 10 
 
CHAPTER VIII. 
 
 HOW TO ORGANIZE ASSOCIATIONS UNDER THE NEW 
 YORK ACT OF 1851, AND IN ANY STATE WHERE 
 THE LAW DOES NOT PROVIDE A DEFINITE 
 SCHEME. 
 
 THE act of 1851 is very general in its terms. It 
 is so broad that it will permit of the incorporation of 
 an association upon any scheme that has been or may 
 be devised for conducting the business of a building 
 and loan association, or an accumulating fund asso- 
 ciation. 
 
 Unless one is somewhat familiar with the character 
 of these associations he will not be able to form a cor- 
 rect impression respecting them by reading this law 
 for their incorporation. This is a defect common to 
 the laws of most of the States of the Union authoriz- 
 ing the incorporation of such associations. 
 
 Section 1 of the act of 1851 provides as follows : 
 
 Any number of persons, not less than nine, may associate 
 and form an incorporated company for the purpose of ac- 
 cumulating a fund for the purchase of real estate, the erection 
 of buildings, or the making of other improvements on lands, 
 or to pay off incumbrances thereon and removing incum- 
 brances therefrom ; and for the further purpose of accumu- 
 lating a fund to be returned to its members who do not 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 139 
 
 obtain advances as above mentioned, when the funds of such 
 association shall amount to a certain sum per share, to be 
 specified in the articles of association. 
 
 The second section provides what shall be con- 
 tained in the articles of association, and is as follows : 
 
 Such persons shall severally subscribe articles of associa- 
 tion, in which shall be set forth the name of the corporation, 
 the tune of its regular meetings, and how special meetings 
 may be called, and what shall constitute a quorum to trans- 
 act business at meetings ; the qualification of members, and 
 how constituted ; what officers, trustees, and attorney there 
 shall be, and how and when chosen, and their duties, and 
 how removed or suspended from office ; the entrance fee of 
 new members and new shares, the monthly or weekly dues 
 per share, the redemption fee on shares on which advances 
 shall be made, and fees to be paid on the transfer of shares ; 
 the fines or penalties for non-payment of dues or fees, or 
 other violation of the articles of association ; the manner of 
 redemption of shares by advances made thereon, the mort- 
 gaged security to be taken on such advances, and how the 
 same may be redeemed or changed ; the manner of the trans- 
 fer or withdrawal of shares ; the manner of investing funds 
 not required for advances on shares ; the qualifications of 
 voters at meetings, and the mode of voting ; the ultimate 
 amount to be paid to the owners of unredeemed shares ; the 
 manner of altering or amending the articles of association, 
 and such other provisions as shall be necessary for the con- 
 venient and effective transaction of the business thereof ; 
 provided that the same shall not in any respect contravene 
 the Constitution or laws of this State. 
 
 The third section provides for the authentication 
 of the articles of the association when they are exe- 
 cuted, and where they should be filed, and reads as 
 follows : 
 
140 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 A true copy of such articles, signed by the officers of the 
 association, together with a statement showing when the 
 association was organized, and the place of the transaction 
 of its business, and the names of the officers and trustees at 
 the time of making of such statement, which shall be verified 
 by oath or affirmation before any officer authorized to take 
 affidavits, to be used in courts of justice, shall be filed in the 
 office of the clerk of the county in which such association 
 shall transact its business ; and thereupon the persons who 
 have subscribed the articles of association as aforesaid, and 
 such other persons as shall become members of the associa- 
 tion, and their successors, shall be a body corporate by the 
 name specified in such articles of association, and shall pos- 
 sess the powers and privileges, and be subject to the provis- 
 ions of title third of chapter eighteen of the first part of 
 the Revised Statutes, so far as those provisions are consistent 
 with the provisions of this act, and they shall by their cor- 
 porate name be capable in law of purchasing, holding, and 
 conveying any real and personal estate whatever which may 
 be necessary to enable said company to carry on their opera- 
 tion named in such certificate. 
 
 The whole act, with the acts amendatory thereof, 
 will be found in the Appendix. 
 
 The first step in the work of organization is to 
 secure nine or more persons who will unite in the un- 
 dertaking. Whoever becomes interested in forming 
 such an association, and it will usually be one person 
 in the beginning, in casting about among his friends 
 to find others to join with him, should keep clearly in 
 mind the importance of securing good men to become 
 incorporates, men who stand well in the community, 
 and who will make good officers for the association. 
 It is not well to stop when nine are secured. There 
 ought to be a much larger number, and the larger the 
 number the better. Having secured as large a num.- 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 14-1 
 
 her as is practicable, the next step is the meeting for 
 the adoption of the articles of association, and for the 
 election of officers. The drafting of these articles and 
 their adoption is a most important matter. The arti- 
 cles not only constitute the charter of the association, 
 but must outline the scheme upon which the business 
 of the association is to be conducted. It usually oc- 
 curs that the person who has been active in having 
 the association formed is more or less familiar with 
 the operation of these associations, and has a printed 
 copy of the articles of association of one of them. If 
 the incorporators wish to organize upon the same 
 scheme, these articles may be easily changed in the 
 matter of names, dates for meetings, etc., and then 
 adopted. If no such copy is at hand, it may be ob- 
 tained by writing to the secretary of some other asso- 
 ciation, and requesting a copy. 
 
 But by this method the faults in the scheme of one 
 association are often perpetuated in another. It has 
 been a common occurrence to adopt articles of associa- 
 tion which the incorporators did not understand, and 
 from want of proper information upon the subject 
 they were not competent to judge whether the pro- 
 visions contained in them were good or bad, or whether 
 they accurately outlined the scheme upon which they 
 wished the business of their association to be con- 
 ducted. 
 
 There are probably in the State of New York at 
 the present time not far from 270 associations in- 
 corporated under the act of 1851. An examination 
 of their articles of association will show an endless 
 variety in their language and their provisions. To 
 select the articles of association^eftprRt>JF#'*e them 
 
 UFI7IRSIT71 
 
142 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 as a precedent and stop at that would not be sufficient 
 for my purpose. It is my aim to give such informa- 
 tion upon the subject as will enable those forming an 
 association to frame articles that will be suitable to 
 the scheme upon which they desire to conduct their 
 business. To accomplish this there is no better way 
 than to give a precedent for the articles of association 
 or constitution, as they are sometimes termed, section 
 by section, and under each section explain the varia- 
 tions and the phraseology in the section necessary to 
 adapt it to the principal schemes upon which these 
 associations are conducted. In this way we shall hope 
 to accomplish better results than by placing precedents 
 in the Appendix, and discussing them here in a gen- 
 eral way. The beginning of the articles of association 
 is properly a preamble, and we so name it. 
 
 PREAMBLE. 
 
 We, whose names are hereto subscribed, under the pro- 
 visions of the laws of the State of New York, and especially 
 an act entitled ' ' An act for the incorporation of building, 
 mutual loan, and accumulating fund association," passed 
 April 10, 1851, and the acts amendatory thereof, do hereby 
 associate ourselves and form an incorporate association for 
 the purposes named in section 1 of said act, viz., for the pur- 
 pose of accumulating a fund for the purchase of real estate, 
 the erection of buildings, or the making of other improve- 
 ments on lands, or to pay off incumbrances thereon, or to aid 
 its members in acquiring real estate, making improvements 
 thereon, removing incumbrances therefrom, and for the 
 further purpose of accumulating a fund to be returned to its 
 members who do not obtain advances as above mentioned, 
 when the funds of such association shall amount to a certain 
 sum per share to be specified in the articles of association ; 
 and we do hereby adopt the following articles of association 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 
 
 for the government of such association and the management 
 of its business. 
 
 An association organizing in any other State can 
 adopt this preamble by simply changing the name of 
 the State, and inserting, in lieu of the act therein 
 quoted, the title of the act under which the association 
 is to be formed, and the purposes for which the law 
 authorizes an association, to be created. 
 
 ARTICLE ONE. 
 
 NAME AND PLACE OF BUSINESS. 
 
 SECTION 1. The corporate name of this association shall 
 
 be "The Association," and its place of business at 
 
 , in the State of New York. 
 
 Any name may be selected for the association which 
 suits the fancy of those engaged in organization. Care 
 should be taken not to adopt the name of any other 
 association already existing in the same State. It is 
 advisable to adopt as part of the name the name of 
 the place where the association is located. 
 
 ARTICLE TWO. 
 
 CAPITAL AND STOCK. 
 
 SECTION 1. The capital of this association shall consist of 
 the accumulated savings of its stockholders, paid in upon 
 stock, with the profits arising from the investment thereof to 
 be made as hereinafter provided. 
 
 SECTION 2. The matured value of shares of stock shall be 
 
 dollars. The stock shall be issued in yearly 
 
 series, and after a new series has begun to be issued, no stock 
 shall issue in a prior series. The total number of shares of 
 
 stock outstanding at any one time shall not exceed 
 
 thousand shares. 
 
144 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 The amount of the matured share may be any sum, 
 but for convenience it should be fixed at $50, $100, 
 $200, or $500. The series may be issued quarter- 
 yearly or semi-yearly. The limit of the number of 
 shares should be controlled by the matured value of 
 shares and the extent of business which the association 
 expects. With the matured value of shares at $200, 
 10,000 shares is a proper limit. 
 
 Who may become Stockholders. 
 
 SECTION 3. Any person, except as hereinafter limited, who 
 is acceptable to the board of directors, may become a stock- 
 holder, and thereby a member of the association by subscrib- 
 ing these articles of association, and taking one or more 
 shares of stock, and paying the entrance fees and dues there- 
 on, as hereinafter provided. Parents and guardians may 
 take and hold shares in the association as trustees in behalf 
 of their minor children or wards, provided the cost of such 
 shares be paid from the personal earnings of such minor 
 children or wards, or by gifts from persons other than their 
 male parents. Married women may take and hold shares in 
 the association, provided the cost of such shares be paid 
 from their personal earnings, the personal earnings of their 
 children voluntarily bestowed for such purpose, or from 
 property bequeathed or given to them by persons other than 
 their husbands. Such parents or guardians, as trustees for 
 their children or wards, shall be members of the association, 
 and entitled to all the rights thereof as though they owned 
 the stock personally, except as hereinafter limited. Upon a 
 minor child becoming of age, the stock so held for him shall 
 be transferred to him, and he shall become a member, and 
 the membership of his trustee, on account of such stock, 
 shall cease. 
 
 The above provisions in reference to parents, 
 guardians, and married women, and the sources from 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 145 
 
 which payments made upon stock held by such classes 
 of persons must be derived, is substantially quoted 
 from section 6 of the act of 1851. Except for such 
 requirement of the law, we should not insert it. In 
 case of married women, the stock will be issued in 
 their name. In the case of a minor child or children, 
 
 it should be issued to , trustee for , the 
 
 name of the parent or guardian being put in the first 
 blank and the name of the child or children in the 
 second blank. 
 
 SECTION 4. A certificate of stock shall be issued to every 
 stockholder, signed by the president and secretary, and under 
 the seal of the association. Such certificate shall state the 
 number of shares it represents, and the number of the series 
 
 of stock in which it is issued. An entrance fee of 
 
 cents per share shall be paid to the association upon the 
 issuing of the certificate. Such certificate of stock may be 
 assigned by the owner thereof, or his duly authorized attorney 
 in the presence of the secretary or president of the associa- 
 tion ; but such assignment shall be subject to all the rights 
 of the association in the stock assigned. The assignee, hav- 
 ing obtained the approval of the board of directors, may sign 
 the articles of association, and upon complying with the re- 
 quirements thereof shall become a member of the association. 
 The association, at their option, may take up the assigned 
 certificate and issue a new certificate to the assignee. For 
 every share assigned, there shall be paid to the association a 
 transfer fee of cents. 
 
 A proper sum for the entrance fee is twenty-five 
 cents per share, and for the transfer fee fifteen cents a 
 
 share. 
 
 Payments on Stock. 
 
 SECTION 5. All payments upon stock other than entrance 
 and transfer fees shall be known as ' ' dues. " Each stockholder 
 
14:6 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 shall pay upon each share of stock held by him, at or before 
 
 every meeting for the payment of dues, the sum of 
 
 , until the share of stock has reached its matured value, 
 
 when the association shall pay the same to him, as herein- 
 after provided in these articles of association. 
 
 Whether the payments shall be weekly or monthly 
 depends upon the scheme adopted by the association, 
 and the amount to be paid at each meeting will be 
 largely influenced by the same consideration. It is 
 usual, where weekly payments are required, to make 
 the dues twenty-five cents, and when monthly, one 
 dollar. The matured value of the shares will also in- 
 fluence the amount required for dues at each meeting. 
 For convenience the dues should be twenty-five cents, 
 fifty cents, one dollar, etc. 
 
 Free Shares, Borrowed Shares, and Limit of Holding. 
 
 SECTION 6. Shares of stock upon which no loan has been 
 made shall be known as "free shares," while shares of stock 
 upon which loans have been made shall be known as "bor- 
 rowed shares." No stockholder shall hold more than 
 
 shares in any one series, except that he may, in addition 
 
 thereto, hold shares as trustee for a minor child or 
 
 children ; but he shall not be allowed to vote upon such ad- 
 ditional shares held as trustee, and except further that the 
 board of directors may allow a borrower to hold ad- 
 ditional shares for the purpose of borrowing upon them. 
 
 But no stockholder shall hold more than borrowed 
 
 shares altogether. 
 
 Limiting the number of shares is to prevent a few 
 obtaining control. A safe limit is ten shares in each 
 series. The limit to be placed upon borrowed shares 
 should be controlled by the class of property upon 
 which the association expects to make loans. 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 147 
 ARTICLE THREE. 
 
 OFFICERS : THEIR ELECTION AND DUTIES. 
 
 SECTION 1. The officers of this association shall be chosen 
 from among the stockholders, and shall be a president, vice- 
 president, secretary, treasurer, and nine directors, all of 
 whom shall constitute the board of directors of the associa- 
 tion. In addition thereto, the board of directors shall ap- 
 point a suitable attorney, who shall be subject to removal by 
 them without notice at any time. Said officers shall be 
 chosen annually at the annual meeting of the association in 
 each year ; their election shall be by ballot, and each share 
 of stock not in arrears, except as limited by these articles of 
 association, shall be entitled to one vote. In case there 
 shall be a failure for any cause to elect officers at the regular 
 time appointed for the annual meeting, a special meeting of 
 the stockholders may thereafter be called for the purpose of 
 electing said officers. All officers shall continue in office 
 until their successors shall have been duly elected and quali- 
 fied. 
 
 Whether all the directors shall be elected annu- 
 ally or whether they shall be divided into classes and 
 one part of them elected annually is a matter upon 
 which the practice of associations differs. We have 
 given our views upon that question fully in Chapter 
 VII, and need not repeat them here. We think the 
 majority of associations allow one vote only for each 
 stockholder, regardless of the amount of stock held by 
 him. If the incorporators wish to follow this rule, 
 the above proposed section should be modified accord- 
 ingly. If the incorporators deem it advisable to have 
 the directors hold office longer than one year, the 
 above section should be modified to conform to the 
 scheme which they adopt. 
 
148 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Suspension and Removal of Officers. 
 
 SECTION 2. The board of directors, by a two thirds vote 
 at a regular meeting, or a special meeting called therefor, 
 shall have power to suspend any officer of the association for 
 cause ; whereupon a special meeting of the stockholders of 
 the association shall be called, in the manner prescribed by 
 these articles, to consider such suspension. At the time of 
 calling such special meeting, notice thereof, with the charges 
 and specifications in writing against the offending officer, 
 shall be served upon him personally, or left at his last place 
 of residence. At such special meeting, or a meeting ad- 
 journed therefrom, the offending officer shall be reinstated 
 or removed by a majority vote of the stock represented at 
 such meeting. 
 
 In the event the association should adopt the mode 
 of allowing each shareholder to cast one vote instead 
 of voting upon his stock, the above should be changed 
 to read " by a majority vote of the stockholders pres- 
 ent at such meeting." 
 
 Vacancies. 
 
 SECTION 3. In case of a vacancy occurring in any office 
 by the death, resignation, or removal of any officer, the 
 board of directors shall have power to fill such vacancy until 
 the next annual election, or until the stockholders shall hold 
 an election to fill such vacancy. 
 
 Duties of President. 
 
 SECTION 4. The president shall preside at all meetings of 
 the stockholders and of the board of directors, sign all cer- 
 tificates of stock and all orders properly drawn upon the 
 treasurer for the payment of appropriations of moneys, see 
 that each officer performs his duties and that the laws of the 
 association are enforced, and, when directed by the board of 
 directors, to duly execute discharges and acquittances of 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 149 
 
 bonds and mortgages, and faithfully and impartially dis- 
 charge all the duties of his office. 
 
 In some associations the articles of association pro- 
 vide that the president shall discharge any bond or 
 mortgage, when entitled to be discharged, without 
 direction from the board of directors. We prefer the 
 course indicated above, which requires the board of 
 directors to direct the discharge before the president 
 has power in the matter. If the other course is pre- 
 ferred by those organizing the association in the place 
 of the clause above relating thereto, the following may 
 be used : " And it shall be his duty to discharge any 
 bond or mortgage held by the association when the 
 same is entitled to be discharged." 
 
 Duties of Vice-President. 
 
 SECTION 5. In case of the absence or disability of the 
 president, the vice-president shall perform his duties. He 
 shall also perform the duties of president in all cases where 
 any proceedings are pending against the president for his 
 suspension or removal. 
 
 Duties of Treasurer. 
 
 SECTION 6. The treasurer shall be the custodian of all 
 funds, securities, contracts, and deeds belonging to the asso- 
 ciation, subject, however, to the direction of the board of di- 
 rectors. He shall receipt for all moneys paid to him, and pay 
 all orders or drafts upon him ordered by the board of directors 
 and signed by the president and attested by the secretary. 
 He shall keep suitable and accurate books of account of all 
 his transactions, subject to the direction of the board of di- 
 rectors as to the form and the manner of keeping the same, 
 and shall make a report of the finances of the association to 
 each regular meeting of the board of directors, which report 
 
150 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 shall be filed by the secretary. His books of account shall 
 be subject to the call and inspection of the board of directors 
 or any member thereof at any time, and shall be subject to 
 the inspection of any stockholder at all reasonable hours. 
 He shall give a bond with at least two sureties, one or more 
 of whom shall not be connected with the bank where he de- 
 posits the funds of the association, in an amount directed by 
 the board of directors, and in form and sufficiency of sureties 
 subject to their approval. At the expiration of his term of 
 office he shall deliver to his successor in office, within five 
 days after the qualification of such successor, all moneys, 
 books, and papers of the association in his possession ; and 
 in case of his suspension and removal from office, he shall 
 deliver the same to the board of directors upon his removal 
 forthwith. 
 
 The above provision, requiring that one or more of 
 the sureties should not be connected with the bank 
 where the treasurer deposits the funds of the associa- 
 tion, may be omitted if the incorporators do not deem 
 it wise to require such a provision. It usually occurs 
 that in case of a failure of a bank that all persons con- 
 nected therewith become insolvent; and if all the 
 treasurer's sureties upon the bond were connected with 
 the bank, by a failure of the bank the bond would 
 become worthless. 
 
 Duties of Secretary. 
 
 SECTION 7. The secretary shall be present at all meetings 
 of the stockholders and board of directors in person, or have a 
 proxy from the board of directors, and keep correct minutes 
 of the proceedings, which shall be transcribed into a suitable 
 minute-book and read at the next meeting for the approval 
 of the board. He shall sign all certificates of stock and all 
 orders directed to be drawn by the board of directors upon 
 the treasurer, and receive the dues, fines, and interest and 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 
 
 any other moneys coming to the association when so directed 
 by the board of directors, and receipt for the same, or assist 
 the board of directors or its committee in receiving and re- 
 ceipting for the same when so directed. He shall publish 
 and serve all notices and advertisements when directed or 
 required to be published or served ; he shall keep an accurate 
 account of all moneys paid to the association ; he shall keep 
 a true account between the association and the shareholders, 
 and give to the shareholders at all times any desired informa- 
 tion in relation to the financial affairs of the association ; he 
 shall keep such books of account and in such manner and 
 form as the board of directors shall require. His books of 
 account shall be subject to the call and inspection of the 
 board of directors or any member thereof at any time, and 
 shall be subject to the inspection of any stockholder at all 
 reasonable hours. When so directed by the board of di- 
 rectors, he shall have an office, known as the office of the 
 association, and be in attendance thereat at such hours of the 
 day as they shall direct. All moneys received by him shall 
 
 be turned over by him to the treasurer within hours 
 
 after the receipt of the same. He shall make such reports to 
 the board of directors as they shall require from time to time ; 
 he shall make a detailed report of the business of the associa- 
 tion at each annual meeting and all other meetings of the 
 stockholders when requested so to do by any officer of the 
 association. He shall have charge of the correspondence of 
 the association, and shall deliver to his successor in office, 
 within five days after the qualification of such successor, all 
 books and papers in his possession belonging to the associa- 
 tion, and, in case of his removal from office, he shall deliver 
 the same to the board of directors forthwith. 
 
 In drafting the foregoing section we have endeav- 
 ored to make it applicable alike to an association which 
 has a regular office for the receipt of dues, interest, 
 and fines, and allows the stockholders to pay the same 
 
152 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 to the secretary at any time prior to the regular meet- 
 ing, as well as to associations which only permit dues, 
 interest, and fines to be paid at the time of the regular 
 meetings. In the latter case the secretary usually as- 
 sists the finance committee of the board of directors 
 in receiving and receipting for dues, etc. We believe 
 it right in all cases to leave the general control of the 
 whole matter to the board of directors. 
 
 Duties of Attorney. 
 
 SECTION 8. It shall be the duty of the attorney to make 
 abstracts of title, or examine the same when procured by the 
 borrower from the county clerk, of all real-estate which has 
 been offered to the association as security for loans and ap- 
 proved by the board of directors or its finance committee, 
 and, if satisfactory, to indorse his approval thereon. He 
 shall prepare all securities given to the association, and see 
 that all policies of fire insurance which are given to secure 
 loans are in proper form and with proper indorsements for 
 the security of the association. His charges for such services 
 shall be reasonable at all times, and subject to the direction 
 of the board of directors, and shall be paid by the borrower, 
 unless the board otherwise directs. He shall see that all 
 mortgages are properly entered for record before any ad- 
 vances are made thereon. He shall meet with the board of 
 directors as required, but shall have no vote. He shall re- 
 ceive no compensation for meeting with the board from the 
 association, except as they may direct. 
 
 The above clause, saying that the attorney shall 
 have no compensation for meeting with the board of 
 directors, except as they shall direct the same, is to 
 obviate any implied agreement to pay him what his 
 services are reasonably worth when he attends at their 
 request. Under the section as it stands the board will 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 153 
 
 have to vote to give him the compensation therefor 
 before he would be entitled to any, although he should 
 attend at their request. 
 
 Finance Committee. 
 
 SECTION 9. The president shall appoint from the nine di- 
 rectors, during the year, three finance committees of three 
 members each, and each committee shall serve for the term of 
 four months. The appointments shall be so made that each 
 director shall serve upon one of said committees. Such 
 committee, except when the board of directors shall other- 
 wise direct, shall pass upon all securities offered to the asso- 
 ciation for loans, subject to the approval of the attorney as 
 to the title of real estate. They shall examine personally all 
 real estate upon which they shall pass, as to its sufficiency as 
 
 a security. They shall hold a meeting on the after 
 
 each regular meeting of the board of directors, for loaning 
 
 money, at m. o'clock. They shall audit all bills 
 
 against the association ; [they shall attend all regular meet- 
 ings for the receipt of dues, interest, fines, etc., and receive 
 and receipt for the same, and at the close of the meeting turn 
 the same over to the treasurer, and take his receipt therefor;] 
 they shall perform such duties proper for a finance com- 
 mittee, as the board of directors shall direct. 
 
 The clause above, inclosed in brackets, in reference 
 to the receipt of dues, etc., by the finance committee, 
 should be omitted when the association wishes to 
 adopt the scheme of having dues, interest, and fines, 
 received wholly by the secretary, when he has an office 
 for that purpose, or under any other arrangements 
 whereby the secretary is authorized to receive and 
 receipt for dues, etc., and in its stead there should be 
 a clause, in substance, as follows : " The finance com- 
 mittee shall audit the accounts of the secretary quar- 
 11 
 
154: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 terly, and at such other times as the board of directors 
 may order." 
 
 Auditors of the Annual Report. 
 
 SECTION 10. The president, at the time of the last meeting 
 for the receipt of dues, etc., before the annual meeting, 
 shall appoint three stockholders who are not officers in the 
 association, who shall examine the books of account of the 
 treasurer and of the secretary, and the annual report pre- 
 pared by the secretary, and verify the same by an examina- 
 tion of the books of the secretary, and of the securities and 
 funds held by the treasurer, and if found to be correct, in- 
 dorse their approval thereon. 
 
 The object of this provision is to have a committee 
 appointed from the stockholders who have had noth- 
 ing to do with the management of the business during 
 the year, for the purpose of verifying the results shown 
 by the detailed annual report of the secretary. 
 
 ARTICLE FOUR. 
 
 MEETINGS OF THE ASSOCIATION. 
 
 SECTION 1. The annual meeting of the stockholders shall 
 
 be held on the day of in each year, at 
 
 o'clock in the evening. 
 
 In fixing the time for the annual meeting, suffi- 
 cient time should be allowed between the last meeting 
 for the receipt of dues, etc., and the loaning of money 
 in the fiscal year, to enable the secretary and treasurer 
 to write up their books, and for the secretary to pre- 
 pare his annual report and have it printed. It will be 
 found advisable in the long run to allow at least two 
 weeks for these purposes. 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 155 
 
 Board Meetings. 
 
 SECTION 2. The board of directors or the finance commit- 
 tee shall hold a meeting on the day of , between 
 
 and o'clock in the evening, for the receipt of 
 
 dues, interest, and fines, and immediately following such 
 meeting the board of directors shall hold a meeting for offer- 
 ing the money of the association to borrowers, and for the 
 transaction of any other business of the association which 
 comes before the board of directors. 
 
 This section relating to the board or the com- 
 mittee for the receipt of dues, etc., offering money for 
 sale, and transacting other business of the association, 
 will vary greatly according to the scheme adopted by 
 the incorporators for conducting the business of the 
 association. If the scheme is adopted whereby dues, 
 etc., are paid to the secretary, then the meeting of the 
 board should not be held until the time is up within 
 which dues, interest, and fines, may be paid, and the 
 meeting of the board will be for the purpose of offer- 
 ing the money for sale, and transacting the regular 
 business of the association ; or, instead of the meeting 
 for this purpose at this time, the finance committee 
 may be authorized to offer the moneys to borrowers, 
 and the meeting of the board of directors be held at 
 some other time for the transaction of such business 
 as may come before them. Again, the section will be 
 modified as the scheme adopted calls for weekly or 
 monthly meetings. The section as given in blank 
 may be filled up either for weekly or for monthly 
 
 meetings. 
 
 Special Meetings of the Board. 
 
 SECTION 3. Special meetings of the board of directors may 
 be called by the president at any time upon twenty-four 
 
156 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 hours' notice. Such notice may be given orally by the presi- 
 dent or secretary, or by serving a written notice, stating the 
 object and time of the meeting, upon each director, or by 
 leaving the same at his residence, in the custody of some 
 person residing therein, of suitable age and discretion. The 
 president shall call a special meeting of the board of direct- 
 ors, when requested so to do by three members, in writing, 
 specifying the purpose for which they desire the meeting to 
 be called. 
 
 It may seem to some persons that the above pro- 
 vision for calling the special meeting of the board of 
 directors allows but a very short time; but in the 
 practical management of an association it will fre- 
 quently be found necessary for the board of directors 
 to come together to consider some matter upon short 
 notice, and if a longer time than twenty-four hours is 
 required, inconvenience at times will be caused. 
 
 Special Meetings of Stockholders. 
 
 SECTION 4. Special meetings of the stockholders may be 
 called by the president, and shall be called by him when- 
 ever requested by ten stockholders, in writing, specifying 
 the purpose for which they desire the meeting called. Five 
 days' notice of any special meeting for any purpose shall be 
 given by mailing, postage prepaid, to the post-office address 
 of every stockholder, as it appears upon the books of the 
 association, a written or printed notice, stating the time and 
 place, and the business to be brought before the association. 
 
 Quorums. 
 
 SECTION 5 stockholders shall constitute a quorum 
 
 at all meetings of the stockholders, and directors shall 
 
 shall constitute a quorum at all meetings of the board of 
 directors. 
 
ORGANIZING UNDER NEW YORK ACT OF 1861. 157 
 
 The number to constitute a quorum should be in- 
 fluenced by the expectations as to the number of stock- 
 holders. 
 
 Post-office Address of Stockholders. 
 
 SECTION 6. At the time of signing the articles of associa- 
 tion, each stockholder and trustee shall write opposite his 
 name his post-office address, and shall notify in writing any 
 change made thereafter in his post-office address. 
 
 The object of this section is to make suitable pro- 
 vision for mailing any notices required to be given by 
 these articles of association. 
 
 ARTICLE FIVE. 
 
 LOANS : TO WHOM MADE. 
 
 SECTION 1. The funds of the association available for 
 loans shall be loaned only to its stockholders. Every stock- 
 holder who can give the required security shall have an equal 
 right with every other stockholder to such funds to an amount 
 not exceeding the matured value of the shares held and owned 
 by him. Loans shall be regarded as advances upon the ma- 
 tured value of the shares borrowed upon, and shall be made 
 only for the matured value of the shares, except, when neces- 
 sary to make out the sum the borrower desires, the frac- 
 tional parts of one fourth or one half of a share may be so 
 advanced. 
 
 Under the foregoing, if the matured value of shares 
 is $200, loans must be in the sum of $200 or a multi- 
 ple thereof ; except a borrower wanted $250, when one 
 share and a quarter could be loaned. The borrower 
 would have to own two shares of stock. If the matured 
 value was $100, he would have to own three shares, and 
 borrow upon two shares and one half of the third share. 
 The section as proposed limits all loans to stockhold- 
 
158 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 ers. In the event of an accumulation and no demand 
 for loans, there should be forced withdrawals, which 
 will be provided for under the head of withdrawals. 
 
 The Funds : How and when offered to Sorrowers. 
 SECTION 2. All funds available for loans shall be offered 
 to borrowers by the board of directors or their financial com- 
 mittee at an open meeting held immediately following the 
 
 regular meeting for the receipt of dues, etc., or at 
 
 such other regular and stated times as the board of directors 
 may direct ; but in the event all of said funds shall not be 
 loaned at said stated meetings, the board of directors or their 
 finance committee may hold special meetings for the purpose 
 of offering such funds to borrowers. 
 
 The offering of the funds to borrowers may be de- 
 volved wholly upon the board of directors, in which 
 case the words " or their finance committee " should 
 be stricken out wherever it occurs ; or it may be con- 
 fided wholly to the finance committee, in which case, 
 in place of " the board of directors or their finance com- 
 mittee," the words " the finance committee of the board 
 of directors " should be substituted ; or the conducting 
 of the sales may be given to the secretary, in which 
 case " the secretary " will be inserted instead of the 
 " board " or its " finance committee." 
 
 Interest. 
 
 SECTION 3. Interest on all loans shall be at the rate of 
 
 per cent per annum, payable in installments at the 
 
 same time that dues are paid upon the stock borrowed upon. 
 
 While legal interest remains at six per cent, we 
 believe it best to make it the interest on loans. Fixing 
 it at a lower rate will only tend to increase the amount 
 of premium bid. 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 159 
 
 Premiums. 
 
 SECTION 4. The right to borrow the funds, when two or 
 more stockholders desire the same at the times they are offered 
 to the borrowers, shall be decided by the bidding of a premium 
 per share ; and the loan shall be awarded to the highest bid- 
 der, and the premium bid shall be deducted from the amount 
 loaned at the time the loan is paid over to the borrower. 
 
 The plan proposed in this section is the gross 
 plan, without the system of rebates. The borrower 
 gives his security for the amount borrowed. The pre- 
 mium is deducted from the sum loaned, and the bor- 
 rower thereafter has simply the interest on his loan 
 and dues on stock to pay. If the incorporators prefer 
 the installment premium plan, which is the most 
 common at present, the following should be adopted 
 in place of the above : 
 
 SECTION 4. The right to borrow the funds, when two or 
 more stockholders desire the same at the times they are offered 
 to borrowers, shall be determined by the bidding of a certain 
 sum per share, to be paid monthly in addition to the monthly 
 installment of interest during the continuance of the loan ; 
 and the loan shall be awarded to the highest bidder, and the 
 security given shall include the payment of such monthly 
 installment of premium. 
 
 In the event the incorporators should prefer the 
 interest premium plan, then the following should be 
 used, in the place of the foregoing sections 2 and 3. 
 
 Premium Interest Plan. 
 
 The right to borrow the funds when offered to borrowers 
 shall be decided by a bidding upon the rate of interest to be 
 paid per annum, payable in monthly installments, at the same 
 time the dues are paid upon the stock borrowed upon. The 
 
160 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 loan shall be awarded to the highest bidder, provided, how- 
 ever, that no bid shall be accepted for a less rate than .... 
 per cent per annum. 
 
 We have in preceding chapters fully discussed these 
 several premium plans, and expressed our convictions 
 as to the respective merits of each, hence we will not 
 discuss them now. We give no form for the gross 
 plan, with the system of rebates, for the reason that 
 we do not wish to be responsible in any degree for con- 
 tinuing a system so complex and so misleading. 
 
 Naming Security. 
 
 SECTION 5. The person or persons to whom a loan or loans 
 are awarded shall forthwith furnish to the board or their 
 committee a full description of the security or securities pro- 
 posed for the loan or loans. 
 
 The description of the securities proposed should 
 be passed at once to the committee charged with the 
 duty of passing upon their sufficiency. In place of 
 " the board or their committee " above named should 
 be inserted the precise officer or officers conducting 
 the sale as fixed in the prior section. 
 
 Rejected Security. 
 
 SECTION 6. The borrower shall pay interest on his loan from 
 the time the same is awarded to him at the sale of the funds. 
 In the event he fails to give satisfactory security, he shall 
 pay interest on the sum bid off until the first stated meeting 
 for the loaning of money after the rejection of his securities, 
 and his right to a loan under his bid shall be lost. 
 
 The borrower should pay interest as above provided, 
 for the reason that the funds must be set aside for 
 him at once upon awarding him a loan. In case the 
 
ORGANIZING UNDER NEW YORK ACT OF 1861. 161 
 
 monthly installment premium plan is adopted, the 
 first line in the section should be amended so as to 
 read, " The borrower shall pay interest and the monthly 
 (or weekly, as the case may be) installment of pre- 
 mium on his loan," etc. ; and also amended below so as 
 to read, " He shall pay interest and the install- 
 ment of premium on the sum bid off," etc. A provision 
 may also be incorporated in the above section provid- 
 ing that in case the loan is passed for a less sum 
 than bid off, and the borrower accepts such reduced 
 loan, he shall pay the interest and installments of pre- 
 mium, if any, upon the full amount bid off up to the 
 first stated meeting for the sales of money after the 
 acceptance of the loan. This latter provision has a 
 wholesome effect in restraining borrowers from over- 
 estimating the value of the real estate they offer as a 
 security. 
 
 ARTICLE SIX. 
 Security for Loans. 
 
 SECTION 1. The security for all loans shall be a bond in 
 the penal sum of twice the amount loaned, secured by a first 
 mortgage upon unincumbered real estate, accompanied by a 
 transfer and pledge to the association of the shares borrowed 
 upon and all accumulations that have or shall accrue thereon ; 
 or, in lieu of the mortgage, the borrower, or another, may 
 transfer and pledge to the association free shares, the with- 
 drawing value of which at the time of borrowing, added to 
 the withdrawing value of the shares borrowed upon, shall 
 exceed the amount loaned and the interest thereon for six 
 months. All bonds and mortgages given to the association 
 shall contain or refer to the conditions for the repayment of 
 loans and the interest thereon prescribed by these articles of 
 association. 
 
162 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS 
 
 In case the installment premium plan is adopted 
 there should be added to the phrase " and the interest 
 thereon," wherever it occurs, the words, " and install- 
 ments of premium bid." If desired, a limit may be 
 placed upon the amount of the mortgage as related to 
 the appraised value of the mortgaged premises. To 
 do this, there would be inserted after the words " real 
 estate " in the second line, the words, " for not exceed- 
 ing per cent of its appraised value as appraised 
 
 by the finance committee." 
 
 Payment of Loans. 
 
 SECTION 2. The borrower shall continue to pay to the asso- 
 ciation the installment of interest (and install- 
 ment of premium) until the shares borrowed upon shall reach 
 their matured value, unless the loan is otherwise paid be- 
 fore that time, when the association shall discharge the se- 
 curities and the borrower shall surrender the stock borrowed 
 upon. A borrower may repay a loan and all arrearages of 
 interest (and installments of premium) and fines thereon, or 
 one share thereof, at any stated meeting for the receipt of 
 dues, etc., or to the treasurer at any other time ; but when 
 not made at said stated meeting he shall pay interest (and 
 installments of premium) up to the first regular meeting for 
 loaning money after such payment. He may pay the loan in 
 full, and thereby entitle him to have the shares borrowed 
 upon released from liability for the loan, or he may have the 
 withdrawal value of the shares applied as a part of the pay- 
 ment, and surrender his stock to the association, and have 
 his bond (with any mortgage accompanying it) discharged. 
 The board of directors shall direct the president and secre- 
 tary to execute a proper discharge of any security held by 
 the association, when for any cause it should be surrendered. 
 
 The blanks at the beginning of the section will be 
 filled out with the words " weekly " or " monthly," ac- 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 163 
 
 cording as the scheme requires weekly or monthly 
 payments. The clause in the brackets will be omitted, 
 except when the installment plan of premium is 
 adopted, in which case the brackets will be removed. 
 Under this section the borrower may pay the whole 
 loan, or any share of the loan, at any time. If paid 
 between the stated meetings for the sales of money, 
 interest must be paid thereon up to such stated meet- 
 ing after the payment. Under this section, no officer 
 of the association will, on his own authority, have the 
 right to discharge the securities ; it must be authorized 
 by the board of directors. We believe this to be the 
 safest course ; but as we have remarked in the section 
 relating to the duties of president, some associations 
 empower the president to discharge without authority 
 from the board. The above section may be easily 
 modified to adapt it to such a course. 
 
 Default on Securities. 
 
 SECTION 3. "Whenever a borrower shall be months 
 
 in arrears in the payment of the dues upon the stock bor- 
 rowed upon and interest upon the loan (or installments of 
 premium bid) or either of them, the whole loan shall become 
 due at the option of the board of directors, and they may 
 proceed to enforce collection upon the securities held by the 
 association. The withdrawal value, at the time of the com- 
 mencement of the action, of all shares pledged as collateral 
 security for the loan shall be applied upon the loan and 
 arrearages of interest (installments of premium) and fines 
 thereon, and the shares shall be deemed surrendered to the 
 association. 
 
 The periods to be filled in the blanks left in the 
 foregoing section as to the time the default shall ex- 
 tend will be influenced by the scheme of the associa- 
 
164 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 tion as to whether it calls for weekly or monthly in- 
 stallments. It is usual to give six months in cases 
 where the installments are paid monthly, and three 
 months where the installments are paid weekly. 
 
 Purchase of Real Estate. 
 
 SECTION 4. The board of directors may purchase at any 
 public sale or at any private sale, when deemed advisable to 
 secure the association from loss, any real estate upon which 
 the association may hold a mortgage, judgment lien, or 
 other incumbrance, or in which it may have any interest ; 
 and may sell, convey, lease, or mortgage the same, or make 
 improvements thereon, as shall seem for the best interest of 
 the association. Upon the decease of a stockholder having 
 received a loan, his heirs, legatees, or legal representatives, 
 or the persons legally liable to pay the loan or the mortgage 
 given to secure the loan, may, upon subscribing to the arti- 
 cles of association and by-laws, succeed to all the rights of 
 the deceased in the association, subject to its rules and regu- 
 lations. 
 
 ARTICLE SEVEN. 
 Fines. 
 
 SECTION 1. Whenever any stockholder shall make default 
 in the payment of his dues or interest (or installments of 
 premium) at any regular meeting or time for the payment of 
 
 the same, when due, he shall pay a fine of per cent 
 
 on the sum defaulted, and shall continue to pay such fine for 
 every said meeting or time while such default continues. 
 
 The provisions of this section are intended to be 
 broad enough to apply to an association which adopts 
 the plan of having dues paid to a single officer at 
 stated times, as well as when the board of directors, or 
 its finance committee, hold stated meetings, weekly or 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 165 
 
 monthly, for the receipt of dues, etc. It imposes the 
 fine for each default. To illustrate, suppose the 
 scheme be one requiring monthly dues, and the stock- 
 holder makes default in the payment of his dues, etc., 
 for May, and makes no payment in June, he will be 
 fined for his June payments and also on his May pay- 
 ment still unpaid, and so on until he shall pay up. As 
 to the amount of the fine, there is much diversity in 
 the practice of associations. We believe in making it 
 10 per cent. It should be large enough to insure 
 prompt payment. 
 
 Forfeitures. 
 
 SECTION 2. In the event any stockholder holding free 
 shares shall be six months in arrears, at any time, for dues 
 thereon, the secretary shall serve upon him personally a no- 
 tice showing said stockholder's arrearages upon said free 
 shares, and requiring him to pay said arrearages within sixty 
 days from the service of notice, or his said shares, and all 
 dues previously paid thereon, will be forfeited to said asso- 
 ciation ; and in the event a personal service of said notice 
 can not be made, a publication thereof in a daily or weekly 
 
 newspaper, published in the of , once in each 
 
 week, for six successive weeks, shall be deemed equivalent 
 to a personal service, and the sixty days within which said 
 defaulting stockholder may pay up his arrearages in case of 
 service by publication, shall commence on the day of the last 
 publication; and in the event such defaulting stockholder 
 shall not pay up the arrearages aforesaid within the sixty 
 days aforesaid, the board of directors, at any regular meeting 
 thereof, by a majority vote, may declare such defaulting 
 stockholder's free shares forfeited to said association, and 
 all moneys previously paid thereon, and thereupon he shall 
 cease to be a member of said association for any purpose 
 whatever. 
 
166 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 This section is framed to meet the requirements of 
 section 4 of the act of 1851. In framing articles of 
 association under any other act in the State of New 
 York or elsewhere, it would be necessary for the incor- 
 porators to refer to the act under which they were in- 
 corporated, and determine whether there was any pro- 
 vision in the act limiting the power of forfeiture. 
 If the general act contained no limitations upon the 
 power of the association in declaring stock forfeited 
 upon which default has been made in the payment of 
 dues thereon, then a section might be drawn to take 
 the place of the above, in language substantially as 
 follows : " The board of directors shall have power, in 
 
 the case of a stockholder months in arrears in 
 
 payment of his dues, to declare his stock forfeited 
 and all moneys due thereon from the association, in the 
 
 event he shall not pay the same within days after 
 
 a notice of the amount of his arrears has been duly 
 served upon him personally, or left at his place of 
 residence, as shown by the books of the association, 
 with some person of suitable age and discretion by the 
 secretary of the association ; and if no person of suit- 
 able age and discretion can be found at said residence, 
 then by affixing said notice to the front door thereof ; 
 but this section shall not apply in case default in pay- 
 ment has arisen by reason of the death of the default- 
 ing stockholder." 
 
 ARTICLE EIGHT. 
 
 DISTRIBUTION OF PROFITS AND LOSSES. 
 
 SECTION 1. Profits and losses shall be distributed at least 
 annually, and always before issuing a new series of stock. 
 Profits shall be distributed in the form of a dividend added 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 167 
 
 to the value of each share outstanding which has not ma- 
 tured. The dividend thus added to each share shall bear 
 the same rate of percentage to the value of the share that 
 the total net profits to be distributed bear to the total 
 value of all the shares to which the distribution is made. 
 In ascertaining the total net profits to be thus distributed, 
 which have accrued since the last distribution, any losses 
 sustained during that time shall be deducted from the gross 
 profits. In the event the losses sustained shall exceed the 
 profits, then the profits shall be deducted from the gross 
 loss, and the net loss shall be assessed upon each share of 
 stock outstanding upon the same principle above given for 
 adding dividends, and the sum assessed upon each share shall 
 be subtracted therefrom. 
 
 Matured stock shall not share in dividends or be liable 
 for losses, but, instead thereof, each matured share, from 
 the time of its maturity until paid off, shall draw interest 
 
 at the rate of per cent per annum, to be paid when 
 
 the stock is paid. 
 
 This system of distributing profits and losses is 
 simple, just, and equitable. It treats all stockholders 
 as partners, and each partner receives profits in pro- 
 portion to the capital which he has in the association, 
 and treats as part of such capital all dividends made 
 to him. We have, in Chapter III, discussed the 
 manner of declaring the dividend. We give an illus- 
 tration in Chapter IX. It should be clearly borne 
 in mind that premiums not yet paid are not profits. 
 Nothing should be counted as profits in declaring 
 dividends which has not been actually paid in. In 
 those associations that have already adopted, or should 
 foolishly, as it seems to me, hereafter adopt the 
 gross plan of premium with a system of rebates, 
 whereby the borrower is allowed a rebate of one eighth 
 
168 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 or one ninth or one tenth upon the premium for each 
 full year of the time remaining in which it is assumed 
 it will take the stock to mature upon which the loan 
 is made, in case he shall repay his loan, in ascertaining 
 the amount of profits to distribute, loans should not be 
 reckoned at their face value, but only at the sum the 
 association would receive if paid off at that time in 
 fact, their present value. Upon this rock many asso- 
 ciations have come to grief. While they had as a part 
 of their scheme the rebate system, they have reckoned 
 their loans outstanding in computing assets at their 
 face value, or apparent value ; whereas their real value 
 was the sum which would pay them off at the time 
 the dividend was declared. Matured stock should 
 not be allowed dividends. They are awaiting pay- 
 ment, and the rate of interest allowed should be low. 
 We suggest three per cent. Matured stock should be 
 paid off as rapidly as the association has funds appli- 
 cable to such purpose. 
 
 ARTICLE NINE. 
 
 WITHDRAWALS, AND HOW COMPUTED. 
 
 This is an important matter, and one in which in 
 practice great diversity exists. It involves two distinct 
 questions : 1. As to what percentage of the profits 
 which have been added to the stock shall the associ- 
 ation retain from the withdrawing stockholder? 2. 
 Shall it be determined and fixed by the articles of 
 association, or shall the power of determining the same 
 from time to time be lodged in the board of directors ? 
 We will give a form of a proper article for either 
 course ; and first we give the form of an article which 
 fixes definitely the share returned. It can be adapted 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 169 
 
 to any rate per cent by simply changing the rate per 
 cent we have used. 
 
 SECTION 1. Any stockholder owning free shares may with- 
 draw the same, upon filing a written notice of his intention so 
 to do with the secretary, and at the next meeting of the 
 board of directors they shall direct orders upon the treasurer 
 to be drawn to pay such stockholders desiring to withdraw, 
 according to the priority in the filing of such notices, as 
 soon as there are funds applicable to the payment of with- 
 drawing stockholders under the provisions of these articles 
 of association. Such withdrawing stockholder shall re- 
 ceive, less any fines he may owe, during the first six months 
 the series has run in which the stock withdrawn was issued, 
 the amount of dues paid thereon, and during the last six 
 months of the first year he shall receive the dues paid thereon 
 and interest at the rate of four per cent per annum ; and 
 after the first year and until the close of the sixth year in 
 the age of the series in which the stock withdrawn was 
 issued, he shall receive the dues paid thereon, and seventy- 
 five per cent of the profits which have been added to said 
 shares in dividends up to and including the last distribution 
 of profits and losses before such withdrawal, together with 
 four per cent interest thereon from the last distribution, to 
 which shall be added also dues paid since such distribution 
 and four per cent interest thereon. During the seventh year 
 of the series of stock, he shall receive eighty per cent of the 
 profits, instead of seventy-five as above ; during the eighth 
 year, eighty-five per cent ; during the ninth year, ninety per 
 cent ; and during the tenth year and until the series mature, 
 ninety-five per cent. 
 
 We believe the rates given above are just and 
 equitable. In the event, however, that a " guarantee 
 fund" should be created and carried, then a larger 
 percentage of the profits might be given to the with- 
 drawing stockholder. The reasons for increasing the 
 12 
 
170 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 percentage as the stock approaches maturity is to 
 stimulate withdrawals, in order that when a series 
 matures there shall not be a large number of free 
 shares remaining. The following is a form in which 
 the power of determining the withdrawal value is 
 lodged with the board of directors within certain lim- 
 itations. That portion of the foregoing form preced- 
 ing the first period will be used with it : 
 
 The board of directors, at each meeting held for making 
 and declaring a distribution of profits and losses, shall also 
 determine the withdrawal value of the shares of stock until 
 the next distribution of profits and losses. In determining 
 such withdrawal value, they shall allow to all shares of stock 
 over two years of age, in addition to the dues paid thereon, 
 less any fines unpaid, seventy per cent of the profits which 
 have accrued and been added to the value of the shares, and 
 as much more as to them shall seem wise. They shall have 
 discretionary power to make the percentage of profits with- 
 drawn uniform upon all such shares, or increase the same 
 as the shares increase in age. In the case of shares not over 
 two years of age at the time of determining the withdrawal 
 value, they shall allow, in lieu of a percentage of profits, in- 
 terest upon the dues paid in at a rate of not less than four 
 per cent per annum. Upon all withdrawals made until the 
 next distribution of profits and losses, in addition to such 
 withdrawal value, interest shall be paid upon such withdrawal 
 value of the shares, and upon all dues paid subsequent to 
 such declaration of withdrawal values, together with such 
 dues, at the rate of four per cent per annum. 
 
 These sections assume the matured value of shares 
 to be $200, and monthly dues $1. If the matured 
 value is placed at a less sum, and dues at $1 a month, 
 or twenty-five cents a week, the times specified, the 
 sections should be shortened to correspond. 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 
 
 ARTICLE TEN. 
 
 THE DIVISION TO BE MADE IN THE APPLICATION OP THE 
 FUNDS OF THE ASSOCIATION. 
 
 SECTION 1. The division of the moneys received by the 
 association between the borrowers, withdrawing shareholders, 
 and matured stock, shall be made as follows : When the 
 association shall not have outstanding any matured stock, 
 one half of the receipts from dues, interest, and fines at every 
 stated meeting shall be offered to borrowers, and withdraw- 
 ing shareholders shall be entitled to the other half. In the 
 event notices of withdrawals have not been filed sufficient to 
 take said one half, the remainder thereof shall be also offered 
 to borrowers. In case there should not be borrowers, and 
 there should be a demand for more than one half by with- 
 drawing stockholders, any sum remaining, after meeting the 
 demands of borrowers, may be applied to withdrawals. And 
 in the event of the association having matured stock unpaid, 
 then one third shall be applicable to matured stock, one third 
 to borrowers, and one third to withdrawals. In case there 
 shall not be demand by borrowers for the one third set aside 
 for them, the same shall be applied to the payment of ma- 
 tured stock, or such balance as remains after the applications 
 of borrowers have been filled. Any moneys received by the 
 association from the repayment of the principal of a loan 
 shall be added to the share set aside for borrowers, if there 
 be demand for the same. If not, they shall be applied in the 
 same manner as provided above for dues, interest, and fines. 
 If at any time there shall be an accumulation of the funds in 
 the treasury of the association for which there is no demand 
 by borrowers, matured stock, or withdrawals, and no pros- 
 pect of a demand in the immediate future, the board of di- 
 rectors may, in their discretion, under rules made by them, 
 compel the withdrawal of free shares in any series at any time 
 after four years from the date of their issue, provided that 
 the shareholders whose shares are to be thus withdrawn com- 
 
172 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 pulsorily shall be determined by lot, and that they shall be 
 paid all dues paid thereon and all profits which have been 
 added to their shares, less any fines and proportionate part 
 of any loss sustained since the last distribution. Whenever 
 a series of stock shall mature, the holders thereof shall re- 
 spectively file with the secretary a notice asking for the pay- 
 ment of the same, and specifying the amount due, and such 
 stock shall be paid in the order of the priority of the filing 
 of such notices. 
 
 The foregoing article is intended to relieve all con- 
 flict that might arise between the three classes of per- 
 sons, viz., holders of matured stock, borrowers, and 
 stockholders desiring to withdraw, in relation to the 
 application of the funds of the association. It also 
 provides a regulation for the payment of matured 
 stock. The stockholder, during the years that his 
 stock is maturing, understands that at its maturity he 
 can not receive his money, except as there are funds 
 applicable to the payment of matured stock, and hence 
 he will not be disappointed if his stock is not paid at 
 once upon its arriving at maturity. The provision 
 with reference to compelling withdrawals provides a 
 safeguard against an accumulation of funds in the 
 association which shall remain uninvested. An occa- 
 sion will seldom arise for using this provision in the 
 articles, but it is wise for such power to be given to 
 the board of directors. 
 
 ARTICLE ELEVEN. 
 
 Compensation of Officers. 
 
 SECTION 1. No officer of this association shall receive 
 compensation for services rendered, except the attorney, as 
 before provided, and the treasurer and the secretary, unless 
 the stockholders of the association, at an annual meeting, or 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 173 
 
 a special meeting, shall authorize the payment of such com- 
 pensation, and fix the amount thereof. The board of di- 
 rectors shall annually determine the compensation to be paid 
 the secretary and the treasurer. 
 
 In nearly all associations of this character the only 
 officers who receive compensation are the secretary and 
 the treasurer, and the salaries paid to them are not 
 large for the amount of services performed. Some 
 associations allow compensation for president; some 
 also provide for the payment of compensation to the 
 committee which passes upon the sufficiency of loans, 
 and charge the amount thereof to the borrowers. This 
 section may be amended, as given above, to suit the 
 incorporators of the association in that particular. 
 
 Incurring of Expenses. 
 
 SECTION 2. No officer of the association shall make or 
 incur any expenses on behalf of the association unless duly 
 authorized so to do by the board of directors. 
 
 By-Laws. 
 
 SECTION 3. The board of directors may enact by-laws for 
 conducting the business of the association not in conflict with 
 these articles of association or the laws of the State. 
 
 ARTICLE TWELVE. 
 
 AMENDMENTS TO THESE ARTICLES OF ASSOCIATION. 
 
 SECTION 1. These articles of association may be amended 
 at any annual meeting of the stockholders, or at any special 
 meeting called for that purpose, by a two-thirds vote of the 
 stock represented at such meeting ; or they may be amended 
 by a majority vote, provided the proposed amendments have 
 been duly mailed to each stockholder one month preceding 
 such meeting. 
 
174 CO-OrERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 If the system adopted by the association is one 
 vote for a stockholder, then the above section should 
 read " stockholders " instead of " the stock repre- 
 sented." 
 
 It is impossible to frame articles of association that 
 will answer the purpose of all associations that may 
 be formed under the act of 1851 ; but, in framing the 
 foregoing, we have attempted to adapt them to all the 
 ordinary schemes upon which the true building and 
 loan association may be conducted. We have no doubt 
 that imperfections may be found in them, but we be- 
 lieve they will furnish a safe guide to all incorporators 
 of associations of this class not only in the State of 
 New York, but in every State in the Union, except 
 as the powers of the corporation may be limited 
 by the general act for the incorporation of this class 
 of associations in the respective States, and that 
 the changes to be made in them to adapt them to 
 the laws of any State in the Union will be very few 
 indeed. 
 
 Signing the Articles of Association. 
 
 After the articles of association have been adopted, 
 they should be subscribed by all who have united in 
 the formation of the society. In cases where a com- 
 pleted draft or printed copy of such articles of associ- 
 ation have been presented to the meeting and have 
 been adopted without material changes, such signing 
 may be proceeded with at once ; but in case changes 
 have been made which will require a new copy to be 
 made before they are in clean shape for signing, an 
 adjournment of the meeting will be had to some fut- 
 ure time to allow such draft to be prepared. Where 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 175 
 
 an adjournment is had for the reason above stated, or 
 for any other reason, two courses may be pursued. 
 One is to have the articles of association ingrossed in 
 a book which shall be known as the " Articles of Asso- 
 ciation Book," and at the adjourned meeting those 
 who have united in forming the association can 
 subscribe the articles of association in the book ; and 
 all other persons thereafter uniting with the associa- 
 tion subscribe the same in the same book. All, in 
 addition to their names, should give their post-office 
 addresses. 
 
 The other course that may be pursued is to have 
 the articles of association printed in form for distri- 
 bution among the members, and to be bound in the 
 pass-books which will be issued to each member 
 when he commences paying dues upon his stock. 
 This course will allow the printed copy to be pasted 
 in the book for members to subscribe instead of 
 the written copy. It will also provide for the copy 
 which is to be filed in the county clerk's office as 
 hereafter described. 
 
 Election of Officers. 
 
 In the event the articles of association adopted are 
 in such condition that they may be subscribed at once, 
 the election of officers should be proceeded with. If, 
 however, the meeting adjourns to allow the articles of 
 association to be ingrossed or to be printed, the elec- 
 tion of officers should be delayed until the adjourned 
 meeting. At such other time as they are elected, the 
 proceedings for their election will be controlled by the 
 provisions adopted in the articles of association except 
 in the following particular : If the articles of associ- 
 
176 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 ation should provide that each shareholder shall be en- 
 titled to as many votes as he holds shares of stock, 
 that provision will not be applicable at the first meet- 
 ing for the election of officers, for the reason that no 
 shares of stock have yet been issued ; and each person 
 uniting in the formation of the association, and who 
 has subscribed the articles of association, will be sim- 
 ply entitled to one vote, the same as though the arti- 
 cles of association provided that in all meetings of 
 the association each shareholder shall be entitled to 
 one vote regardless of the number of shares owned by 
 him. 
 
 Filing the Articles of Association. 
 
 As we have already seen by section 3 of the act 
 of 1851, a copy of the articles of association, signed by 
 the officers of the association, together with a state- 
 ment showing when the association was formed ; the 
 place of the transaction of its business, and the names 
 of its officers and directors at the time of making said 
 statement, duly verified, must be filed in the office of 
 the clerk of the county where the association is to 
 transact its business. The following is the proper 
 form for such statement : 
 
 To all whom it may concern: 
 
 We, the undersigned, do hereby state and certify that the 
 foregoing is a true copy of the articles of association adopted 
 
 by the association of the of the State of New 
 
 York. That such association was organized and such articles 
 
 of association adopted on the day of , 18. . That 
 
 the place where said association will conduct its busi- 
 ness is the in the county of , in the State of New 
 
 York. That the following are the names of the officers and 
 
ORGANIZING UNDER NEW YORK ACT OF 1851. 177 
 
 directors or trustees of the said association at this time, to 
 
 wit : , President ; , Vice-President ; 
 
 , Treasurer ; , Secretary. 
 
 directors or trustees. 
 
 This statement should immediately follow the copy 
 of the articles of association, and should be signed by 
 each of the officers with their official titles. Im- 
 mediately following the same should be an affidavit 
 made by the president, or any other officer, as follows : 
 
 State of New York, ) 
 
 County of , j * 
 
 , President of the Association of the 
 
 county of , in the State of New York, being duly 
 
 sworn, says that he is the President of the Associa- 
 tion of the county of , in the State of New York ; 
 
 that the foregoing is a true copy of the articles of associa- 
 tion of said association, and that the foregoing statement, in 
 all respects, correctly states the date of the organization of 
 the said association, the place where the business thereof is 
 to be transacted, and the names of the officers, directors, or 
 trustees thereof at this date, and that the names of the officers 
 and trustees above signed to said copy of the articles of asso- 
 ciation and the statement of facts immediately following the 
 same are the officers and directors or trustees of said associa- 
 tion at this time, and that such statement is made and signed 
 as above, in conformity to section 3 of the act of 1851, in 
 Chapter 122, entitled " An act for the incorporation of Build- 
 ing, Mutual Loan, and Accumulating Fund Associations," for 
 the purpose of effecting the incorporation of such association 
 
 as by said section provided. Sworn to before me this 
 
 day of , 188.. 
 
1Y8 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 When the instrument is completed it will contain, 
 first, a true copy of the articles of association ; next, 
 the statement when the association was organized, the 
 place where its business is to be transacted, and the 
 names of its officers and directors or trustees ; next, 
 the signatures of the officers of the association ; and 
 lastly, the affidavit. 
 
 The copy used for making this instrument for fil- 
 ing may be a printed copy, in case the articles of 
 association are printed. When completed, the same 
 should be filed in the county clerk's office, where the 
 association is located. With the filing of this instru- 
 ment, the incorporation is completed. 
 
CHAPTER IX. 
 
 HOW TO KEEP ACCOUNTS. 
 
 THE keeping of accounts seems a very simple mat- 
 ter when an association is first organized ; but after a 
 few years' experience many vexatious difficulties will 
 be met unless a proper system is adopted at the begin- 
 ning. Begin right and the future is easy; start 
 wrong, and the success of the association may be en- 
 dangered. Under a wrong system there may appear 
 to be a greater surplus to be distributed than in fact 
 exists. Many associations in the past, working under 
 the gross system with a system of rebates on the re- 
 payment of loans, have fallen into the error of treating 
 as assets the face value of all securities held, without 
 deducting the premium bid on the loan that would be 
 deducted from the face value in case of repayment of 
 the loan. 
 
 The system adopted should be as simple as possible 
 and secure accuracy ; but it will be found quite impos- 
 sible to secure the desired accuracy unless the system 
 involves double entry. There can be no excellence 
 without labor. A set of account-books that will reveal 
 at all times with unerring accuracy the actual condi- 
 tion of the association, is a source of pride to the 
 secretary who has kept them, and inspires conn- 
 
180 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 dence in the shareholders in the wisdom of the man- 
 agement. 
 
 We can not enter upon an extended discussion of 
 book-keeping, but the purpose we have in view in this 
 work would be incomplete if we did not outline a suit- 
 able system of book-keeping. The system given in 
 this chapter has been in actual operation for many 
 years in one of the most successful associations in this 
 country. The able secretary, James N. Ward, Esq., of 
 Elmira, New York, a lawyer as well as an expert ac- 
 countant, has written out for us the system in use by 
 him, many features of which have been of his own 
 origination, and whatever merit this system contains 
 is due largely to him. We fully approve of it and 
 assert that any secretary who adopts it will sooner or 
 later thank us for outlining the system for him. 
 
 The outline given assumes the matured value of a 
 share at $200 ; monthly dues of one dollar ; interest 
 at 6 per cent per annum ; fines for default of payment 
 of dues and interest, 10 per cent of amount defaulted 
 each month ; entrance fee twenty-five cents per share ; 
 transfer fee ten cents a share ; stock issued in series. 
 The plan of book-keeping given can be readily modi- 
 fied as to details, so as to adapt it to any changes 
 from the typical scheme adopted. The remainder 
 of this chapter is substantially in the language of 
 Mr. Ward. 
 
 A treatise on book-keeping is not within the pur- 
 view of a work of this kind ; but for the assistance of 
 the new secretary and treasurer, forms are here given 
 which have been used for several years by the Che- 
 mung Valley Mutual Loan Association, of Elmira, 
 New York, and have been fully proved by experience. 
 
HOW TO KEEP ACCOUNTS. Igl 
 
 Specimen entries for each book are given in the forms. 
 To keep a ledger-account with every member of an 
 association, such as would show in dollars and cents the 
 amount of dues paid by him and the dividends on his 
 shares, would involve a vast amount of labor and con- 
 sequent expense. The same information can be other- 
 wise obtained with equal accuracy and much less labor 
 and expense. Every share of stock is of precisely the 
 same value in the same series. The main set of books 
 will show the value of one share in each series ; there- 
 fore, an auxiliary set of stock-books showing the series 
 in which, and the number of shares in a series held by 
 each member, gives all the necessary data with which 
 to find the value of the shares of each individual 
 member. 
 
 The simple multiplication of the value of one share 
 by the number of shares in the series held by the indi- 
 vidual member gives the desired information. 
 
 The secretary's main set of books consist of a dues, 
 interest, and fines book ; cash-received book ; journal 
 day-book ; ledger and transfer book. 
 
 The secretary's auxiliary books consist of a stock 
 journal day-book ; stock ledger, with index giving the 
 address of each member ; stock trial-balance book ; se- 
 curity register ; and book containing by-laws, to be sub- 
 scribed by members on joining the association ; index 
 and trial-balance book for main ledger ; and inventory 
 book. 
 
 For the purpose of these forms, it will be assumed 
 that dues and interest are to be paid monthly. In 
 associations where payments are to be made weekly or 
 otherwise, the necessary modifications of the forms 
 here given can readily be made. Notwithstanding the 
 
182 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 
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HOW TO KEEP ACCOUNTS. 183 
 
 first act of a new association after it is organized is to 
 receive members and issue certificates of stock, yet it 
 would seem that the most logical order in which to 
 consider the books is to begin with the dues, interest, 
 and fines book. This book is really a blotter for the 
 main set of books, as will appear from examination of 
 the accompanying form. 
 
 The foregoing is the " W " page of the dues, interest, 
 and fines book, and gives all of the various entries 
 which can properly come upon that book. The en- 
 tries in this book are made by the secretary at the 
 meeting as he stands beside the treasurer or member 
 of committee when the money is paid in. The treas- 
 urer or other officer receives the money, announces the 
 name of the member paying and the sum paid, and 
 the secretary puts it down. The book contains a page 
 or more for each letter of the alphabet, and is cut in 
 at the margin and lettered like an index. The col- 
 umns are so headed as to explain themselves, unless it 
 be the left-hand columns. The column headed 
 " Shares " contains the number of shares of non-ma- 
 tured stock which each member holds set opposite to 
 the respective members' names. 
 
 The column headed "Int." gives the number of 
 shares borrowed on, and, where the stock and interest 
 and payments conform to the plan announced in the 
 preceding remarks, the sum of the shares held and 
 shares borrowed on, gives the sum in dollars which is 
 to be paid monthly by the shareholder. It will be 
 found convenient to minute under the month in which 
 it occurs any change in the status of a member's 
 shares. For example, in the beginning of the fiscal 
 year " April " Samuel Wheeler has ten shares of stock, 
 
184: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 and has borrowed on five of them. This is shown in 
 the April "due" column " 6 /{ 5 "; in July he paid 
 his loan which is minuted " Pd. L." Lucy Williams 
 has ten shares ; in June she borrows on ten shares ; 
 
 this is shown by the entry " l L Q " In April Joseph 
 
 Wrigley paid five months' dues four months' in ad- 
 vance. This is shown by the entry " Pd. April " in 
 the "due" columns of the four subsequent months. 
 This form, when preparing such a book or blotter, 
 should be enlarged so as to include the twelve months 
 of a fiscal year, if series are issued yearly. 
 
 These memoranda are useful only in checking for 
 errors and to prove accuracy. 
 
 The next book in rotation is shown by the follow- 
 ing form, and may be properly styled the cash-received 
 book. 
 
 The entries in the cash- received book are made 
 from the dues, interest, and fines book, and also from 
 the memorandum made by the secretary at the meet- 
 ing of other payments received which do not properly 
 belong in that book. 
 
 For the purpose of illustrating more fully, the 
 July column of the dues, interest, and fines book, or 
 blotter, before given, is carried into this book. By a 
 comparison of the entries of the forms of the two 
 books, the uses and purposes of the cash-received 
 book will be apparent. The first money column 
 shows the amount of dues paid, the second the amount 
 of interest paid, the third the amount of fines paid, 
 the fourth the amount of entrance fees paid (this col- 
 umn is used only when new shares have been issued 
 to a member), and the fifth money column gives the 
 
TO KEEP ACCOUNTS. 
 
 185 
 
 CASH-RECEIVED BOOK. 
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186 CO-OrERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 total payment and is the sum of the entries in all of 
 the other columns. The sum set down in the " total " 
 column is also the same sum that is set down in the 
 " paid " column of the same month of the dues, inter- 
 est, and fines book opposite the name of the member. 
 The totals of the first, second, third, and fourth columns 
 added together must agree with the footing of the 
 fifth or " total " column. After making and compar- 
 ing the footings of the columns as shown in the form, 
 the entries are made of the items on the memorandum 
 before mentioned made by the secretary at the meet-" 
 ing. Eeferring to the preceding form, the first entry 
 after the recapitulation shows that Samuel Wheeler, 
 in addition to paying his dues and interest, paid 
 $1,000, the amount of his loan. The next entry 
 shows that John D. Williams, in addition to paying 
 his dues and interest, paid $50 on account, to be accu- 
 mulated with like payments, until combined, they 
 will equal and cancel $200 (one share) of his loan, 
 and thereby reduce his interest payment one dollar 
 per month. 
 
 If the posting to the ledger is done directly from 
 the cash-received book, without the intervention of the 
 journal, " DUES " account is credited with the monthly 
 total of the " dues " column, " INTEREST " account is 
 credited with the monthly total of the " interest " col- 
 umn, " FINES " account is credited with the monthly to- 
 tal of the "fines" column, "ENTRANCE FEES" account 
 is credited with the monthly total of the " entrance 
 fees " column, " LOANS " account is credited with the 
 monthly total of the loans repaid, any member is cred- 
 ited with the excess of his payment over the amount 
 due from him for dues, interest and fines (no account 
 
HOW TO KEEP ACCOUNTS. 187 
 
 is kept on the general ledger with members to show 
 the amount of dues, interest, fines, or entrance fees 
 paid), and the "TREASURER'S" account is charged with 
 the sum total of the credits enumerated. In the event 
 the scheme of the association as to premiums is the 
 installment plan, there should be an additional col- 
 umn for premium paid. Under the gross plan, the 
 premiums are paid in fact at the time the loan is per- 
 fected and the order given, the amount of the premium 
 being deducted from the face of the loan. The entry 
 for the premium may then be made in the journal 
 day-book, according to the entry of the loan to John 
 D. Williams, as shown in the third entry of the form 
 of that book following. 
 
 The journal day-book is the next in order, and its 
 form and use are familiar to all double-entry book- 
 keepers. It is given here, however, perhaps unneces- 
 sarily, for the double purpose of making a complete 
 and continuous set of forms, and to give a com- 
 plete sample of the entries in loan association book- 
 keeping. 
 
 Explanations so far as necessary will be placed 
 under the entry in foot notes. 
 
188 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 JOURNAL DAY-BOOK. 
 
 Elraira, N. Y., April 3, 1883. 
 
 The Elraira Mutual Loan Association, 
 a corporation duly organized under 
 and by virtue of the laws of the 
 State of New York on the third day 
 of April, 1883, with an authorized 
 capital of not to exceed 10,000 shares, 
 of the par value of $200 per share, 
 outstanding at any one time, is now 
 ready to begin business. Assets 
 nothing. Liabilities for expenses of 
 incorporation not yet audited. 
 
 *rfV 
 
 TREASURER, To SUNDRIES,* 
 
 Receipts of 1st meeting for receiving 
 
 dues : 
 
 To DUES on 1,000 shares issued, 
 To ENTRANCE FEES on 1,000 shares 
 
 issued, 
 
 24. 
 
 EXPENSE, To TREASURER, 
 
 Drew orders on the Treasurer for ex- 
 
 penses of incorporation, as follows : 
 No. 1. J. N.Ward for att'y'a fees, $40 
 No. 2. "Advertiser," association 
 
 notices, 5 
 
 No. 3. "Evening Star," associa- 
 
 tion notices, 5 
 
 50 
 
 27. 
 
 LOANS, To SUNDRIES, 
 
 Loaned to John D. Williams on his 
 
 bond and mortgage of city property, 
 
 6 shares at $10 per share premium, 
 
 To PREMIUM, on 6 shares at $10, 
 
 To TREASURER, Order No. 4, drawn 
 
 favor of John D. Williams for loan, 
 
 28. 
 
 FURNITURE and FIXTURES, 
 
 To TREASURER, 
 
 Drew order favor of H. S. Gilbert & 
 Co. for fire-proof safe. 
 
 $1,250 
 
 50 
 
 1,200 
 
 60 
 
 $1,000 
 250 
 
 50 
 
 1,140 
 
 60 
 
 * This entry is taken from and might be posted directly from the 
 cash-received book, and omitted from this book entirely. The Dues 
 a/c might also be omitted, and use the Capital Stock /c. 
 
HOW TO KEEP ACCOUNTS. 
 
 189 
 
 EInrira, N. Y., November 24, 1885. 
 
 
 
 SUNDRIES, To SUNDRIES,*, 
 J. N. Ward has withdrawn 5 shares 
 
 
 
 
 
 
 
 series No. 1 Capital Stock, on whichj 
 
 
 
 
 
 
 
 he has paid dues to and including 
 
 
 
 
 
 
 
 the November meeting : 
 
 
 
 
 
 
 
 CAPITAL STOCK, 1st series, 5 shares at 
 
 
 
 
 
 
 
 $53.32, 
 
 266 
 
 GO 
 
 
 
 
 
 DUES, April to November meeting, 8 ( 
 
 
 
 
 
 
 
 months at $5, 
 
 40 
 
 
 
 
 
 
 INTEREST, April to November meeting, 
 on 5 shares at $1.48, 
 
 7 
 
 40 
 
 
 
 
 
 To Loss and GAIN, Profits retained on 
 
 
 
 
 
 
 
 1st series, 5 shares at $0.63, 
 
 
 
 3 
 
 15 
 
 
 
 To TREASURER, Order No. 694, favor 
 
 
 
 
 
 
 
 of J. N. Ward, 
 
 
 
 810 
 
 85 
 
 
 
 February 14, 1886. 
 
 
 
 
 
 
 
 SUNDRIES, To SUNDRIES, 
 
 
 
 
 
 
 
 The attorney of the association has 
 
 
 
 
 
 
 
 this day paid over to the Treasurer 
 
 
 
 
 
 
 
 the proceeds of thfc foreclosure of 
 
 
 
 
 
 
 
 Richard Roe mortgage 
 
 
 
 
 
 
 
 The decree of foreclosure cancels 10 
 
 
 
 
 
 
 
 shares 2d series of stock, pledged by 
 
 
 
 
 
 
 
 R. Roe to secure the loan, and ap- 
 
 
 
 
 
 
 
 plies the withdrawal value on Dec. 
 
 
 
 
 
 
 
 29, 1885, of said shares thereon. 
 
 
 
 
 
 
 
 Withdrawal value, Dec. 29, 
 
 
 
 
 
 
 
 1885, of 2d series, 10 shares, 
 
 
 
 
 
 
 
 at $35.34, $353 40 
 
 
 
 
 
 
 
 Less arrears of dues, $70 00 
 
 
 
 
 
 
 
 Less fines on arrears of 
 
 
 
 
 
 
 
 dues, 24 86 
 
 
 
 
 
 
 
 
 
 
 
 
 Withdrawal value of said 
 
 
 
 shares as applied, $258 54 
 CAPITAL STOCK, 2d series, 10 shares at 
 
 
 
 
 
 
 
 $25.61, 
 
 256 
 
 10 
 
 
 
 
 
 DUES, 2 mos. paid in current year on 
 
 
 
 
 
 
 
 10 shares of stock, at $2, 
 
 20 
 
 
 
 
 
 
 TREASURER, Amount paid to him by 
 
 
 
 
 
 
 
 attorney, 
 
 1,853 
 
 92 
 
 
 
 
 
 To LOANS, 10 shares loan to R. Roe, 
 
 
 
 
 
 
 
 foreclosed, 
 
 
 
 2,000 
 
 
 
 
 To INTEREST, On loan and on judgment, 
 To FINES, On arrears of dues as 
 
 
 
 78 
 
 70 
 
 
 
 above, $24 86 
 
 
 
 
 
 
 
 On arrears of interest, 24 86 
 
 
 
 49 
 
 72 
 
 
 
 To Loss and GAIN, Profits retained on 
 
 
 
 
 
 
 
 canceled stock, 2d series, 10 shares, 
 
 
 
 
 
 
 
 at $0.16, 
 
 
 
 1 
 
 00 
 
 * In case of withdrawal of stock, debit Capital Stock a/c with the 
 holding value of the shares at the last annual meeting, and debit Dues 
 account with the dues paid thereon during the current year, and credit 
 Loss and Gain with the profits retained. 
 
190 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Elmira, N. Y., February 14, 1886. 
 
 SUNDRIES, To SUNDRIES, 
 
 The attorney of the association re- 
 ports the completion of the foreclos- 
 ure of the mortgage to the associa- 
 tion made by John Smith, and that 
 on the 3d day of February, 1886, he 
 bid off on behalf of the association 
 the mortgaged property at $1,800, 
 and that a judgment for deficiency 
 of $334.82 lias been entered in favor 
 of the association against John 
 Smith. The decree of foreclosure 
 cancels 10 shares 3d series stock, 
 pledged by John Smith to secure 
 the loan, and applies the withdrawal 
 value on Dec. 29, 1885, of said shares 
 thereon. 
 
 Withdrawal value on Dec. 29, 
 1885, of 3d series, 10 shares, 
 at $21.86, $218 60 
 
 Less arrears of dues, 
 7 mos., at $10, $70 00 
 
 Less fines on arrears 
 of dues, 24 86 
 
 94 86 
 
 Withdrawal value of said 
 shares as applied, $123 74 
 
 The attorney's bill of costs and ex- 
 penses of the foreclosure is audited, 
 and ordered paid, at $150. 
 
 CAPITAL STOCK, 3d series, 10 shares, 
 at $12.40, 
 
 DUES, 2 months paid in current year 
 on 10 shares of stock at $2 per 
 share, 
 
 REAL ESTATE, Smith property bid off 
 at 
 
 JUDGMENTS RECEIVABLE, For defi- 
 ciency, 
 
 To LOANS, 10 shares loan to J. Smith, 
 foreclosed, 
 
 To INTEREST, On loan and judgment, 
 
 To FINES, On arrears of dues 
 
 as above, $24 86 
 
 On arrears of inter- 
 est, 24 86 
 
 To Loss and GAIN, Profits retained on 
 canceled stock 3d series, 10 shares 
 at $0.04, 
 
 To TREASURER, Drew Order No. 701, 
 favor J. N. Ward, for att'y's bill as 
 audited as above, 
 
 124 
 
 1,800 
 33482 
 
 2,000 
 7870 
 
 4972 
 40 
 150 
 
HOW TO KEEP ACCOUNTS. 
 
 191 
 
 Elmira, K Y., April 16, 1888. 
 
 
 
 The Elinira Mutual Loan Association, 
 having reached the close of its fifth 
 fiscal year, the following entries are 
 made for the purpose of closing the 
 books preparatory to making the 
 annual report and statement of its 
 condition. 
 BALANCE, To SUNDRIES,* 
 Accrued dues, interest, and fines un- 
 paid at this date, as follows : 
 Name. Dues. Int. Fines. 
 W. V. Calkins, $10 
 C. W. Holmes, 10 $10 $1 00 
 H. S. Hudson, 10 60 
 $30 $10 $1 50 
 
 To DUES, Accrued and unpaid as 
 above, 
 To INTEREST, Accrued and unpaid, as 
 above, 
 To FINES, Accrued and unpaid, as 
 above, 
 
 41 
 
 85 
 25 
 
 1,308 
 
 50 
 
 80 
 10 
 1 
 60 
 
 1,308 
 
 50 
 
 SUNDRIES, To BALANCED 
 Dues and interest paid in advance as 
 follows : 
 Name. Dues. Interest. 
 W. B. Coffin, $5 
 J. E. Dohoney, 10 $5 
 G. D. Parsons, 20 20 
 $35 $25 
 
 DUES, Paid in advance, as above, 
 INTEREST, Paid in advance, as above, 
 
 BALANCE, 
 To INTEREST, 
 Interest accrued on loans of 1,308 
 shares outstanding payable at April 
 meeting. % 
 
 * The items for this entry are obtained from the dues, interest, and 
 fines book, by running through and finding those in arrears, and how 
 much. 
 
 t The items for this entry are obtained from the dues, interest, and 
 fines book by running through the book and finding those who have 
 paid an even number of months in advance, and been marked paid. 
 The page of dues, interest, and fines book heretofore given has an ex- 
 ample in the entries following the name of Joseph Wrigley. 
 
 J This interest, it is evident, belongs to the profits of this year's 
 business, although it is not payable until the first meeting of the next 
 year. 
 
192 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Elmira, N. Y., April 16, 1888. 
 
 
 1 
 1 
 
 DUES, 
 To CAPITAL STOCK, 
 12 months' dues on 7,000 shares of 
 stock in all series now outstanding.* 
 
 84,000 
 
 12,660 
 412 
 
 475 
 
 26 
 50 
 
 50 
 
 732 
 
 12,825 
 
 30 
 70 
 
 48 
 
 84,000 
 13,624 
 
 732 
 12,825 
 
 SUNDRIES, To Loss AND GAiN,t 
 INTEREST, Net profit from this source, 
 FINES, " " 
 ENTRANCE FEES, Net profit from this 
 source, 
 TRANSFER FEES, Net profits from this 
 source, 
 PREMIUM, Earned during year, 
 KEAL ESTATE, Net profit from this 
 source, including rentals, 
 
 Loss AND GAIN, 
 To EXPENSE, 
 Expenses of conducting the business 
 for the year, 
 
 Loss AND GAIN, 
 To CAPITAL STOCK, % 
 The Board of Directors, on this 16th 
 day of April, 1888, declared a divi- 
 dend on the capital stock of 6 per 
 cent ad valorem, as follows : 
 Series No. 1, 1,200 shares at 
 $3.59, $4,308 
 SeriesNo.2,l,300sharesat $2.70, 3,510 
 Series No. 3, 1,400 shares at $1.92, 2,688 
 SeriesNo.4,l,500sharesat $1.13, 1,695 
 SeriesNo. 5, l,600sharesat$0.39, 624 
 
 $12,825 
 
 * The capital stock has, or should have been, increased during the 
 year by the full amount of twelve months' dues. If there are any ar- 
 rears, they are collectible assets. If there are any advance payments, 
 they are a liability. 
 
 t The items for this entry are taken from the ledger for all except 
 the two at the foot, " Premium" and " Eeal Estate," and, with those 
 exceptions, are the balances of the several accounts after posting the 
 items from the dues, interest, and fines book before mentioned. The 
 items of profit from " Premium " are ascertained by deducting from the 
 balance of the ledger account the amount of premium which borrowers 
 would be entitled to have returned to them in case all the loans were 
 now repaid, the amount of premium liable to be returned to be ascer- 
 tained from the record of each loan in the security register, on the basis 
 prescribed by the by-laws. 
 
 \ This entry is made up from the minutes of the directors' meeting 
 at which the dividend is declared. 
 
HOW TO KEEP ACCOUNTS. 
 
 193 
 
 Elmira, 1ST. Y., April 16, 1888. 
 
 
 
 BALANCE, To SUNDRIES, 
 
 $266,477 84 
 
 
 
 
 
 To TREASURER, To close the account, 
 
 
 
 843 
 
 02 
 
 
 
 To LOANS, " u 
 
 
 
 261,600 
 
 
 
 
 To FURNITURE AND FIXTURES, To 
 
 
 
 
 
 
 
 close the account, 
 
 
 
 150 
 
 
 
 
 To W. H. PETERS' s CONTRACT, To 
 
 
 
 
 
 
 
 close the account, 
 
 
 
 1,750 
 
 
 
 
 To REAL ESTATE, To close the account, 
 
 
 
 1,800 
 
 
 
 
 To JUDGMENTS RECEIVABLE, To close 
 
 
 
 
 
 
 
 the account, 
 
 
 
 33482 
 
 I 
 
 
 
 SUNDRIES, To BALANCE, 
 
 
 
 267,767 34 
 
 
 
 PREMIUM, To close the account, 
 
 950 
 
 
 
 
 
 Loss AND GAIN, To close the account, 
 
 41634 
 
 
 
 
 1 
 
 CAPITAL STOCK, " 
 
 265,326 
 
 
 
 
 
 JOHN D. WILLIAMS, " " 
 
 75 
 
 
 
 
 
 CLAY W. HOLMES, " 
 
 1,000 
 
 
 
 
 
 
 The Elmira Mutual Loan Association 
 
 
 
 
 
 
 
 begins its sixth fiscal year with re- 
 
 
 
 
 
 
 
 sources and liabilities as follows: 
 
 
 
 
 
 
 
 Resources. 
 SUNDRIES, To BALANCE, 
 
 
 
 267,827 
 
 34 
 
 
 
 TREASURER, Cash in his hands, 
 
 84302 
 
 
 
 
 
 LOANS, Secured and outstanding, 
 
 261,600, 
 
 
 
 
 
 FURNITURE AND FIXTURES, As per in- 
 
 | 
 
 
 
 
 
 ventory, 
 
 150 
 
 
 
 
 
 W. H. PETERS'S CONTRACT, Balance 
 
 
 
 
 
 
 unpaid on his contract t 
 
 1,750 
 
 
 
 
 
 REAL ESTATE, As per inventory or 
 
 
 
 
 
 
 appraisal, 
 JUDGMENTS RECEIVABLE, Unpaid judg- 
 
 1,800 
 
 
 
 
 
 ment due association, 
 
 33482 
 
 
 
 
 
 FINES, Accrued and unpaid, 
 
 150 
 
 
 
 
 
 DUES, " 
 
 30 
 
 
 
 
 
 INTEREST, " u " 
 
 1,318 
 
 
 
 
 
 
 Liabilities. 
 
 
 
 
 
 
 
 BALANCE, To SUNDRIES, 
 
 267,82734 
 
 
 
 
 
 To DUES, Paid in advance, 
 
 
 
 35 
 
 
 
 
 To INTEREST, Paid in advance. 
 To Loss and GAIN, Undivided profits 
 
 
 
 25 
 
 
 
 
 held against judgment receivable 
 considered doubtful, 
 
 
 
 416 
 
 34 
 
 
 
 To JOHN D. WILLIAMS, Paym't bv him 
 toward cancellation of 1 share of loan, 
 
 
 
 75 
 
 
 
 
 To CLAY W. HOLMES, Retained on 
 
 
 
 
 
 
 
 loan until completion of house on 
 
 
 
 
 
 
 
 the mortgaged premises, 
 To PREMIUM, Unearned premiums on 
 
 
 
 1,000 
 
 
 
 
 loans, 
 
 
 
 950 
 
 
CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Elmira, N. Y., April, 16, 1888. 
 
 
 1 
 
 To CAPITAL STOCK, 
 1st series, 1,200 shares, at 
 $68.91, $82,692 
 2d series, 1,300 shares, at 
 $53.21, 69,173 
 3d series, 1,400 shares, at 
 $39.53, 55,342 
 4th series, 1,500 shares, at 
 $25.53, 38,295 
 5th series, 1,600 shares, at 
 $12.39, 19,824 
 
 
 
 265,326 
 
 
 These last two entries seem to be self-explanatory. They are taken 
 from the balance-sheet, if one is made up, or from the ledger, if not. 
 
 Dr. 
 
 GENERAL LEDGER. 
 
 Capital Stock. 
 
 Cr. 
 
 188S. 
 
 
 
 
 
 
 1888. 
 
 
 
 
 
 April 
 
 16 
 
 To Balance, 
 
 21 
 
 $265,326 
 
 
 April 
 
 16 
 16 
 16 
 
 By Total credit, 
 By Dues, 
 By Loss and 
 
 18 
 
 $168,501 
 84,000 
 
 
 
 
 
 
 
 
 
 Gain, 
 
 20 
 
 12,825 
 
 
 
 
 
 $265,326 
 
 
 
 
 
 
 $265,826 
 
 
 
 
 
 
 
 1888. 
 
 
 
 
 
 
 
 
 
 
 
 April 
 
 16 
 
 By balance, 
 
 28 $265,826 
 
 The form of this book and its use needs no expla- 
 nation, as it is familiar to all book-keepers. The total 
 credits and the closing entries only are given of the 
 Capital Stock account. 
 
 Direction for making or preparing the Annual Report 
 or Statement. 
 
 To begin with, an appraisal of all the real and per- 
 sonal property of the association should be made by a 
 committee in the inventory book. The secretary 
 should make a statement of the amount of premiums 
 which (under the by-laws) would be returnable if all 
 
HOW TO KEEP ACCOUNTS. 195 
 
 the loans outstanding should be repaid at the next 
 meeting. Also a statement of the arrears of dues, 
 interest, and fines separately (see entry in journal 
 day-book). Also a statement of dues and interest 
 paid in advance by any members (see entry in journal 
 day-book). Trial balances must be taken to prove 
 the correctness of the main ledger and stock ledger. 
 As additional proof of the accuracy of the capital 
 stock account in the main ledger, compare the bal- 
 ance of the account with the holding value of all shares 
 in all series shown in the last report (series now more 
 than one year old), which the stock ledger shows to 
 be still outstanding. For example, suppose the bal- 
 ance of the capital stock account in the main ledger 
 to be $168,501, and the holding value at the com- 
 mencement of the year of one share in each of the 
 various series to be as follows : 1st series, $53.32 ; 
 2d series, $38.51 ; 3d series, $25.61 ; and 4th series, 
 $12.40, and the stock ledger shows now outstanding 
 as follows : 
 
 1st series 1,200 shares at $53.32 as above = $63,984 
 2d " 1,300 " 38.51 " 50,063 
 
 8d " 1,400 " 25.61 " 35,854 
 
 4th " 1,500 " 12.40 " 18,600 
 
 And we have value of shares over one year old out- 
 standing $168,501, proving that the capital stock 
 account in the main ledger is correct. Additional 
 proof of the correctness of the dues account in the 
 main ledger is obtained by adding to the balance of 
 the account all the arrears of dues, and deducting 
 therefrom the dues paid in advance, and comparing the 
 results with the dues for the period on all the shares 
 of all series outstanding. For example, suppose the 
 
196 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 main ledger shows the balance of the dues account to 
 be $84,005, the arrears of dues are in all $30, and 
 the dues paid in advance aggregate $35, we have 
 $84,005 + $30 = $84,035 - $35 = $84,000. 
 
 Numbers of shares outstanding as shown by stock 
 ledger : 
 
 1st series 1,200 shares 
 
 2d " 1,300 " 
 
 3d " 1,400 " 
 
 4th " 1,500 " 
 
 5th " 1,600 " 
 
 Total 7,000 " at $12 = $84,000 
 
 (twelve months' dues at one dollar per month per share), 
 which proves the dues account to be correct. Having 
 thus proved and cross-checked the books, you know 
 they are correct, and you can now proceed to close 
 them. The closing entries are given in full in the 
 form for the journal day-book, and need not be re- 
 peated here. The computations from which those 
 entries are taken will now be given in detail. It will 
 be found convenient to use a rough balance sheet, on 
 which the results of the business can be kept before 
 making the computation. No elaborate ruled sheet is 
 necessary, and the whole can be made in pencil if pre- 
 ferred, so long as the figures are taken down accu- 
 rately. 
 
 Following is the sheet from which the closing 
 entries in the journal day-book were taken. It may 
 as well be stated that the computation of profits are 
 made as of the date of the next meeting for receiving 
 dues (when a new series will be issued), and withdrawal 
 values should bear interest from that date, and not the 
 date of the annual meeting : 
 
IIOW TO KEEP ACCOUNTS. 
 
 197 
 
 g : : : :g : : :g 
 "383S 
 
 Is 
 
 o 
 
 Ha* i i 
 
 , 
 
 >.<* -Jn eo. 
 
 : S S 
 :|J 
 
 :al3^ 
 
 . : 5^|^lQ^ 
 
 Mil 
 
 :|:::: Hi 
 
 jUtyjii 
 
 HHSXcoS-^T-'aia 
 
 ll^Iflltlllllllllll 
 
 ^^^^^^^5^wH5w3oo^ 
 
198 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 The foregoing balance-sheet shows that the net 
 profits for the year were $13,241.34, but for prudent 
 management retain an amount equal to the amount 
 of judgment receivable of doubtful value $334.82 as 
 undivided profits, leaving for dividend $12,906.52. 
 The capital stock account shows the capital as of the 
 beginning of the year to be $168,501. Dues are also 
 capital ; but as they have been accumulating during 
 the year, it must be ascertained what their equivalent 
 for a year would be by equating the payments, by 
 which we find the $84,000 dues to be equal to an in- 
 vestment for one year of $45,500 ; adding this to the 
 capital stock account, balance gives capital invested 
 for one year equal to $214,001. Divide the net prof- 
 its, $12,906.52 by $214,001, and we find the dividend 
 earned six per cent and a very small fraction. The 
 fraction being, so small, we leave the sum it repre- 
 sents to add to the undivided profits above mentioned. 
 
 It is necessary to get the dividend and holding 
 value per share. The following method is recom- 
 mended for its simplicity and accuracy : The dividend 
 on one share of the last series issued is the same as the 
 dividend on the dues or installments on one share 
 of every other series for the year. Dues paid month- 
 ly during a year equal the investment of one dollar for 
 seventy-eight* months, or $6.50 for the twelve months. 
 
 * The dollar paid for the first month's dues has been invested for 
 twelve months ; the dollar for the second month's dues has been in- 
 vested for eleven months ; the dollar paid for third month's dues 
 has been invested ten months, and so on until the entire twelve 
 months' dues are paid in. The twelfth months' dues being invested 
 one month before the next series is issued, making as you will see 
 by continuing the illustration, an investment equal to one dollar 
 for seventy-eight months. 
 
HOW TO KEEP ACCOUNTS. 
 
 199 
 
 At six per cent rate of dividend earned gives divi- 
 dend thirty-nine cents for the dues on one share of the 
 last (fifth) series issued and of the dues portion of one 
 share of every other series. The holding value of one 
 share of first series at commencement of the year was 
 $53.32 X .06=13.20, the dividend, plus thirty-nine 
 cents dividend on the dues of one share as above 
 equals $3.59, the total dividend on one share of first 
 series. 
 
 Below is given the holding value of one share in 
 each series, according to the above explanation, in the 
 form in which the computation is made : 
 
 
 First series. 
 
 Second ceries 
 
 Third series. 
 
 Fourth 
 series. 
 
 Fifth 
 teries. 
 
 Holding value of 1 share at 
 the beginning of the year. 
 Dues paid during year 
 Dividend on holding value. 
 Dividend on dues paid in 
 during the year 
 
 $53 82 
 12 00 
 3 20 
 
 39 
 
 $38 51 
 12 00 
 2 81 
 
 89 
 
 $25 61 
 12 00 
 1 58 
 
 89 
 
 $12 40 
 12 00 
 .74 
 
 39 
 
 $12 00 
 
 89 
 
 Total dividend one share . . 
 
 3 59 
 
 2 70 
 
 1 92 
 
 1 13 
 
 89 
 
 Present holding value of 1 
 share 
 
 $68 91 
 
 $53 21 
 
 $39 53 
 
 $25 58 
 
 $12 89 
 
 
 
 
 
 
 
 The balance-sheet and this computation are made 
 up by the secretary and presented to the board of di- 
 rectors at a meeting held for the purpose of ascertain- 
 ing and declaring the dividend, and when approved 
 by them by a resolution entered in the minutes, are 
 entered in the " journal day-book " (see closing en- 
 tries) and the report for the members and for publica- 
 tion is made accordingly. 
 
200 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 STOCK JOURNAL DAY-BOOK. 
 
 *i 
 
 & 
 
 fc 
 4 
 
 
 
 
 1 
 
 
 i ! 
 
 s 
 
 1 
 
 S 
 
 
 
 Elmira, N. Y., April 23, 1883. 
 
 
 
 
 
 
 
 
 i 
 
 CAPITAL STOCK, SERIES No. 1, 
 
 1-5 
 
 1 
 
 45 
 
 
 
 
 
 72 
 
 To SUNDRIES,* 
 
 
 
 
 1 
 
 1 
 
 10 
 
 
 72 
 
 To JAMES N. WARD, 
 
 
 
 
 2 
 
 110 
 
 
 72 
 
 To SAMUEL WHEELER, 
 
 
 
 
 3 
 
 110 
 
 
 
 To JOHN D. WILLIAMS, 
 To LUCY WILLIAMS, 
 
 
 
 
 4 
 
 5 
 
 I 1 1 t 
 
 10 
 5 
 
 
 
 To EOBERT WOOD, 
 
 
 
 
 
 
 
 
 
 27. 
 
 
 
 
 
 
 
 i 
 
 2 
 
 Mem. Loan made at April meeting, 
 John D. Williams, 6 shares, f 
 
 
 
 
 
 
 
 
 
 November 24, 1885. 
 
 1 
 
 1 
 
 5 
 
 
 
 
 
 72 
 
 JAMES N. WARD, 
 
 
 
 
 1 
 
 1 
 
 5 
 
 
 1 
 
 To CAPITAL STOCK, SERIES 1,J 
 
 
 
 
 
 
 
 
 
 Certificate No. 689, issued to J. N. Ward 
 
 
 
 
 
 
 
 
 
 for five shares 1st series, retained by 
 
 
 
 
 
 
 
 
 
 i * 
 mm. 
 
 
 
 
 
 
 
 
 
 SEYMOUR DEXTER, 
 
 203 
 
 2 
 
 5 
 
 
 
 
 
 72 
 
 To JAMES N. WARD,* 
 
 
 
 
 690 
 
 2 
 
 5 
 
 
 
 February 14, 1886. 
 
 
 
 
 
 
 
 
 
 RICHARD ROE, 
 
 212 
 
 2 
 
 10 
 
 
 
 
 
 
 To CAPITAL STOCK, SERIES 2, 
 
 
 
 
 212 
 
 2 
 
 10 
 
 
 
 JOHN SMITH, 
 To CAPITAL STOCK, SERIES 3, 
 
 408 
 
 3 
 
 10 
 
 408 
 
 3 
 
 10 
 
 
 
 Mem. Loans foreclosed,! 
 Richard Roe, 10 shares 
 
 
 2 
 
 
 
 
 
 
 
 John Smith, 10 " 
 
 
 3 
 
 
 
 
 
 
 
 20 shares 
 
 
 
 
 
 
 
 * The above shows the form of entry in this book when shares are 
 issued. The sum received for them appears in the cash-received book. 
 They are in this department dealt with only in regard to the series and 
 number of shares. 
 
 t This item is posted, in pencil, to the u Series and number of shares 
 borrowed on" and the " Shares pledged " department of John D. Will- 
 iams' s account in the stock ledger. 
 
 J The above is the appropriate entry in case of a withdrawal of stock. 
 
 * The above is the appropriate entry on a transfer of stock from one 
 shareholder to another. 
 
 I The above arc the appropriate entries in this book in case of the 
 foreclosure of mortgages and the cancellation of shares according to the 
 
HOW TO KEEP ACCOUNTS. 
 
 201 
 
 Dr. 
 
 STOCK LEDGER, PART I. 
 
 Capital Stock, Series One. 
 
 Or. 
 
 
 
 
 
 Stock 
 
 
 
 
 
 Stock re- 
 
 Date. 
 
 Remarks. 
 
 
 lo 
 
 issued. 
 
 Date. 
 
 Remarks. 
 
 
 J, 
 
 deumed. 
 
 
 
 
 
 e f> 
 
 
 
 
 
 
 c fc 
 
 
 
 
 
 
 
 S'riet 
 
 Sh. 
 
 
 
 e 
 
 
 S'rie* SLar' 
 
 1888. 
 
 
 
 
 
 
 
 1885. 
 
 
 
 
 
 
 
 April 
 
 23 
 
 
 1 
 
 1-5 
 
 1 
 
 45 
 
 Nov. 
 
 24 
 
 ByJ.N.Ward 
 
 2 
 
 1 
 
 1 
 
 5 
 
 The entries in this hook are taken from the stock 
 journal day-book, and Part I shows the aggregate 
 shares issued and redeemed in each series. The rul- 
 ing is necessarily different from the individual accounts 
 in the stock ledger shown on the next two pages, 
 because the information desired is entirely different. 
 
 entries of the same date in the form of the journal day-book hereinbe- 
 fore shown. The mem. entries are to bo posted in pencil to the loans 
 paid and shares released columns of Richard Roe and John Smith ac- 
 counts in the stock ledger. 
 
202 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Dr. 
 
 STOCK-LEDGER, PART II. 
 
 James N. Ward. 
 
 
 
 
 , | 
 
 Series and number of 
 
 Shares 
 
 Shares 
 
 DaU. 
 
 lUmarki. 
 
 Fol. 
 
 Cer- 
 tifi- 
 
 Se- 
 
 shares disposed of 
 
 borr'wOd 
 
 paid. 
 
 
 
 
 cate. 
 
 
 112 
 
 3 
 
 4 
 
 5 
 
 6 
 
 7 
 
 8 
 
 9 
 
 10 
 
 J' 1 ! 
 
 5 
 
 Date. ' 
 
 1885, Nov. 
 1886, Apr. 
 
 24 
 
 25 
 
 Withdrawn, 
 Balance, 
 
 2 
 L.72 
 
 1 
 689 
 and 
 
 5 
 
 and 
 
 5 
 5 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 690 
 
 2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Samuel Wheeler. 
 
 27 
 
 Williams. 
 
 
 
 
 
 
 II 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1884 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 1 
 
 6 Jan. 23 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 78 
 
 1 
 
 5 
 
 
 This portion (Part II) of the stock-ledger is for keeping 
 the accounts with the members to show how many shares of 
 stock they have, how many have been borrowed on, and how 
 many have been pledged. The credit side shows how many 
 shares have been acquired, and the debtor side how many 
 have been withdrawn. It is better to have twenty columns 
 for " shares acquired " and " shares disposed of," instead of 
 
HOW TO KEEP ACCOUNTS. 203 
 
 STOCK-LEDGER, PART II. 
 
 James N. Ward. Cr. 
 
 Stock 
 pledged. 
 
 Released. 
 
 Date. 
 
 Remarks. 
 
 Fol. 
 
 Cer- 
 tifi- 
 cate. 
 
 Se- 
 ries. 
 
 Series and number of 
 shares acquired. 
 
 | 
 
 i* 
 
 Date. 
 
 a 
 
 1 
 
 2 
 
 3 
 
 4 5 
 
 6 
 
 7 
 
 8 9 
 
 
 
 
 
 
 
 1888. 
 
 
 
 
 
 6S& 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 April 
 
 1885. 
 
 28 
 
 By Cap. Stock. 
 
 1 
 
 1 
 
 1 
 
 10 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Nov. 
 
 24 
 
 By Transfer, 
 
 2 
 
 690 
 
 2 
 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 10 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1886. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 April 
 
 25 
 
 By Balance, L.72 
 
 689 
 
 1 
 
 6 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 and 
 
 and 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 690 
 
 2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 188T. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 April 
 
 22 
 
 By Cap. Stock, 
 
 41 
 
 715 
 
 5 
 
 
 
 
 
 10 
 
 
 
 
 Samuel Wheeler. 
 
 2T 
 
 1 
 
 10 
 
 
 
 
 1883. 
 April 
 
 23 
 
 By Cap. Stock, 
 
 1 
 
 2 
 
 1 
 
 10 
 
 
 
 
 
 
 
 
 John D. Williams. 
 
 1 
 
 78 
 
 1 
 1 
 
 6 
 5 
 
 
 
 
 1888. 
 April 
 
 23 
 
 By Cap. Stock, 
 
 1 
 
 8 
 
 1 
 
 10 
 
 
 
 
 
 
 
 
 ten, as shown. The columns for "shares borrowed" and 
 " shares paid " amount to a single-entry ledger account, as do 
 also the " shares pledged " and " released " columns, making 
 really three ledger accounts with each member, all under the 
 same heading. Reference to the stock journal day-book will 
 supply the necessary information. 
 
204: CO-OPERATIVE SAYINGS AND LOAN ASSOCIATIONS, 
 
 TKIAL BALANCE OF STOCK-LEDGER, 
 
 L. F. 
 
 NAME. 
 
 Dr. 
 
 Series and number of shares 
 
 
 
 
 1 
 
 2 
 
 3 
 
 4 
 
 5 
 
 
 
 
 
 
 
 72 
 
 .Tamps N. Ward . . 
 
 
 5 
 
 5 
 
 
 
 10 
 
 
 
 
 
 
 
 72 ! Samuel W heeler 
 
 
 10 
 
 
 
 
 
 
 
 
 
 
 
 72 JohnD. Williams .... 
 
 
 10 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 Capital Stock, Series 1. 
 
 1200 
 
 
 
 
 
 
 
 
 
 
 
 
 2 
 
 8 
 
 Capital Stock. Series 2. 
 Capital Stock, Series 8. 
 
 1300 
 1400 
 
 
 
 
 
 
 
 
 
 
 
 
 4 
 5 
 
 Capital Stock, Series 4. 
 Capital Stock, Series 5. 
 
 1500 
 1600 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Footings, page 1 
 
 
 275 275 250 
 
 825 
 
 315 
 
 
 
 
 
 
 
 
 Footings, page 2 
 
 
 325 800 j 300 
 
 875 
 
 875 
 
 
 
 
 
 
 
 
 Footings, page 8 
 
 
 800 825 350 
 
 375 
 
 425 
 
 
 
 
 
 
 
 
 Footings, page 4 
 
 
 275 895 
 
 500 
 
 _42_5 
 
 _ 
 
 
 
 
 
 
 
 
 
 7000 
 
 1200 
 
 1300 
 
 1400 
 
 15001600 
 
 
 
 
 
 
 
 INSURANCE EXPIRATION BOOK. 
 
 'Reg. No. 
 
 NAME. 
 
 Location of property. 
 
 Amoun 
 
 t. 
 
 Jan. 
 
 Feb. 
 
 Mch. 
 
 Apr. 
 
 1 
 
 John D. Williams 
 
 520 Lake St. ... 
 
 2000 
 
 no 
 
 1989 
 
 
 
 
 278 
 
 Samuel Wheeler 
 
 921 Main St 
 
 1000 
 
 no 
 
 
 
 
 
 801 
 
 Richard Itoe 
 
 1206 Benton St 
 
 2000 
 
 00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 This book has thirty-one pages, and is used for a single 
 day to a page. A policy expiring on the twelfth day of any 
 month in the year and any year would be entered on this 
 page, the year being set down in the column headed for the 
 proper month. Turn to the form of the security register, 
 and you find loan No. 301, Richard Roe. His property is in- 
 sured in the ^Etna Insurance Co., and expires the last time on 
 
HOW TO KEEP ACCOUNTS. 
 
 205 
 
 TAKEN APRIL 16, 1888. 
 
 held. 
 
 
 Series and number of shares borrowed on. 
 
 
 Total 
 
 
 
 
 
 
 
 1 
 
 2 
 
 8 
 
 4 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 Total 
 
 
 
 
 
 20 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 10 
 
 5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ft 
 
 
 
 
 
 10 
 
 10 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 10 
 
 
 
 
 
 1-440 
 
 00 
 
 45 
 
 35 
 
 25 
 
 38 
 
 
 
 
 
 
 
 
 
 
 
 203 
 
 
 
 
 
 1675 
 
 75 
 
 f>5 
 
 45 
 
 T,5 
 
 45 
 
 
 
 
 
 
 
 
 
 
 
 285 
 
 
 
 
 
 1775 
 
 66 
 
 85 
 
 86 
 
 80 
 
 83 
 
 
 
 
 
 
 
 
 
 
 
 898 
 
 
 
 
 
 2070 
 
 85 
 
 90 
 
 85 
 
 55 
 
 1)2 
 
 
 
 
 
 
 
 
 
 
 
 407 
 
 
 
 
 
 7000 
 
 M, 
 
 275 
 
 250 
 
 225 
 
 258 
 
 
 
 
 
 
 
 
 
 
 
 1308 
 
 TWELFTH DAY OF THE MONTH. 
 
 May. 
 
 June 
 
 July. 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Dec. 
 
 Company. 
 
 Agent. 
 
 1891 
 
 
 
 1887 
 
 
 
 
 Home, of New York 
 Liberty, of New York 
 ^Etna of Hartford 
 
 J. M. Sly & Co. 
 J. M. Sly & Co. 
 T. Perry & Co. 
 
 
 August 12, 1887. Above you find it on the page for the 
 twelfth day of the month, and 1887 written in the August 
 column. Entries are made from the policy when it is re- 
 ceived, and in case of change of policies, so as to expire on a 
 different day of the month, a new entry would be made as 
 above under the new day of expiration. 
 
206 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Gl SECURITY REGISTER FOR SECRETARY. 
 
 No. 
 
 Borrower. 
 
 Maker of bond and mortgage, and 
 securities taken. 
 
 Shares bor- 
 rowed on. 
 
 Date. 
 
 Amoui 
 
 Certif. 
 
 Sr. 
 
 Sh. 
 
 301 
 
 Richard Roe. 
 Foreclosed. 
 
 1 bond executed by Richard Roe ... 
 1 mortgage executed by Richard 
 Roe and Susan Roe, his wife. . . . 
 1 assignment of stock executed by 
 R Roe 
 
 212 
 
 2 
 
 10 
 
 1684. 
 April 
 1884. 
 April 
 1884. 
 April 
 
 30 
 30 
 30 
 
 2000 
 2000 
 2000 
 
 1 certificate of stock, No. 212, for 2d 
 series, 10 shares, pledged by Rich- 
 ard Roe. 
 1 abstract of title. 
 1 ,<Etna Ins. Co. policy, No. 7080. 
 Received the above-named securi- 
 ties May 20, 1884. 
 G. D. Parsons, Treasurer. 
 
 When the loan is perfected and the mortgage is returned 
 from the office for recording to the attorney of the association, 
 the attorney should pass the papers over to the secretary, who 
 will enter them on this register, and pass them over to the 
 treasurer, taking the treasurer's receipt hereon for the papers 
 passed over. This fixes the responsibility for the preservation 
 of the papers, and if any are omitted, it is known at the time. 
 
 It is convenient to make a brief minute in the column 
 
 SECURITY REGISTER FOR TREASURER. 
 
 No. 
 801 
 
 Borrower. 
 
 Maker of bond and mortgage, and 
 securities taken. 
 
 Shares bor- 
 rowed on. 
 
 Date. 
 
 Am oi 
 
 Ctrtif. 
 
 Ser. 
 
 Sh. 
 10 
 
 Richard Roe. 
 Foreclosed. 
 
 1 bond executed by Richard Roe. . . 
 1 mortgage executed by Richard 
 Roe and Susan Roe, his wife 
 1 assignment of stock executed by 
 R Koe 
 
 212 
 
 2 
 
 1884. 
 April 
 1884. 
 April 
 1884. 
 April 
 
 30 
 30 
 30 
 
 2000 
 2000 
 2000 
 
 1 certificate of stock, No. 212, for 2d 
 series, 10 shares, pledged by Rich- 
 ard Roe. 
 1 abstract of title. 
 
HOW TO KEEP ACCOUNTS. 
 SECURITY EEGISTER. 
 
 207 
 
 61 
 
 Payments. 
 
 Amount 
 of 
 insurance. 
 
 Insurance company. 
 
 Policy expires 
 
 Remark.. 
 
 Date. 
 
 Amount. 
 
 Month. 
 
 Dayj Year. 
 
 
 
 
 
 2000 
 
 
 JStna 
 
 Aug. 
 
 1? 
 
 1884-' I 87 
 
 Mortgage recorded 
 
 
 
 
 
 
 
 
 
 
 
 April 80, 1884, in 
 
 
 
 
 
 
 
 
 
 
 
 book No. 71, pape 
 
 
 
 
 
 
 
 
 
 
 
 68, of premises .No. 
 1206 Benton St. 
 
 
 
 
 
 
 
 
 
 
 
 February 14, 1886, this 
 mortgage foreclosed 
 and the proceeds 
 paid over to the 
 
 
 
 
 
 
 
 
 
 
 
 treasurer. 
 
 headed " Borrower " of the disposition of the loan as " fore- 
 closed," " paid," while the fuller explanation appears in the 
 " remarks " column. 
 
 The different policies of insurance on the property are to 
 be entered here with date of expiration, to show the exact 
 situation of the securities in each loan. The insurance expi- 
 ration book is to give a handy minute of the expiration of all 
 policies, to prevent failure to renew. 
 
 SECURITY REGISTER. 
 
 Payments. 
 
 Amount 
 
 
 Policy expires 
 
 
 
 of 
 
 Insurance company. 
 
 
 Remarks. 
 
 Date. 
 
 Amount. 
 
 insurance. 
 
 
 Month. 
 
 Day 
 
 Tear. 
 
 
 
 
 
 
 2000 
 
 
 JStna 
 
 Auff. 
 
 19 
 
 1884-'87 
 
 Mortgage recorded 
 
 
 
 
 
 
 
 
 
 
 
 April 80, 1884, to 
 
 
 
 
 
 
 
 
 
 
 
 book No. 71, page 
 68, of premises No. 
 
 
 
 
 
 
 
 
 
 
 
 1206 Benton St. 
 
 
 
 
 
 
 
 
 
 
 
 February 14, 1886, this 
 
 
 
 
 
 
 
 
 
 
 
 mortgage foreclosed 
 and the proceeds re- 
 
 
 
 
 
 
 
 
 
 
 
 ceived. 
 
208 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 The treasurer's security register is ruled like the 
 secretary's, the only variation in the make-up being 
 that no receipt for the papers is provided. All of the 
 remarks made in connection with the secretary's regis- 
 ter apply to this, as the information desired is the 
 same in both cases. 
 
APPENDIX. 
 
 NEW YORK. 
 
 CHAPTER 556, LAWS OF 1887. 
 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATION. 
 
 1. Corporators. Corporate Name. 
 
 SECTION 1. Any fifteen or more persons, being of full age, 
 may form an association as provided in this act. All associa- 
 tions formed under the provisions hereof shall be known as co- 
 operative savings and loan associations ; and the name of every 
 association, so formed, shall contain, as a part thereof, the 
 words Co-operative Savings and Loan Association. 
 
 2. Objects. 
 
 SEC. 2. The object and purpose of such associations shall be 
 to encourage industry, frugality, home-building, and savings 
 among its members ; the accumulation of savings, the loaning 
 of such accumulations to its members, and the repayment to 
 each member of his savings when they have accumulated to a 
 certain sum, or at any time when he shall desire the same, or 
 the association shall desire to repay the same. 
 
 3. Certificate of Association. Statements in. 
 SEC. 3. Said association shall become incorporated by tho 
 said fifteen or more persons making, signing, and acknowledg- 
 ing, in the manner and form prescribed for the acknowledg- 
 ment of deeds in this State, a certificate, wherein shall be stated 
 
210 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the name of said association; that the association is formed 
 under and for the purposes prescribed in this act; the town, 
 village, or city where the association is located within this 
 State ; and the limit of the number of shares of stock it shall 
 have outstanding at any one time. When made as aforesaid, 
 said certificate shall be filed and recorded in the oifice of the 
 Secretary of State, and upon said certificate being so filed and 
 recorded, the Secretary of State shall issue a certificate, in 
 proper and suitable form, declaring the facts contained in said 
 original certificate, and the filing and recording thereof in his 
 office, and which latter certificate shall thereupon be recorded 
 in the county clerk's office of the county where said association 
 is located ; and upon the same being so recorded, the persons 
 named in the certificate first above mentioned, their associates 
 and successors, shall become a corporate body. 
 
 4. Officers. By-Laws. Special Meetings, and voting thereat. 
 Holding over by Officers. 
 
 SEC. 4. The officers of the association shall consist of a 
 president, vice-president, treasurer, and secretary, who shall be 
 ex-officio members of the board of directors, which shall consist 
 of nine members, exclusive of said ex-officio members. Other 
 officers may be authorized by the by-laws. The duties and 
 compensation of the officers, their terms of office, the time of 
 their election, and time of periodical meetings of the officers 
 and shareholders shall be determined by the by-laws; except 
 that the board of directors shall determine each year the com- 
 pensation of the treasurer and secretary. 
 
 Special meetings of the officers and shareholders shall be 
 called and held as provided by the by-laws. Each shareholder 
 shall be entitled to one vote, at all meetings of the shareholders, 
 for each share owned by him or held by him as trustee not in 
 arrears for dues. All officers shall hold office until their suc- 
 cessors are duly elected and assume the duties of their office. 
 No association shall expire from neglect on its part to elect 
 officers at the time prescribed by the by-laws. 
 
APPENDIX. 211 
 
 5. Capital of Association. Limitation. Shares, How Issued. 
 
 Unpledged /Shares. Limitation of Shares. 
 SEC. 5. The capital of said association shall consist of the 
 accumulated savings of its members, which it holds, and shall 
 not exceed at any time one million dollars, and shall be divided 
 into shares of the matured value of two hundred dollars each. 
 The total number of shares outstanding at any time shall not 
 exceed ten thousand. The shares shall be issued in yearly or 
 half-yearly series, in such amounts in each series, and at such 
 times as shall be determined by the by-laws of the association. 
 No share of a prior series shall be issued after the issuing of 
 shares in a new series. Shares which have not been pledged as 
 a collateral security for the repayment of a loan shall be called 
 unpledged shares. Shares that have been so pledged, shall be 
 called pledged shares. No person shall hold more than ten un- 
 pledged shares in any one series, nor more than twenty pledged 
 shares in one series. 
 
 6. Dues. Payment Thereof. Fines for Arrears. Entrance Fee. 
 
 SEC. 6. Savings paid to the association upon shares shall be 
 called dues. At or before each stated monthly or semi-monthly 
 meeting of the board of directors each shareholder shall pay to 
 the board or a committee thereof, one dollar dues upon each 
 share of stock held by him until the share reaches the value of 
 two hundred dollars, or it is withdrawn, canceled or forfeited. 
 Payment of dues on shares of each series shall commence from 
 its issue. The association shall have power to impose and col- 
 lect a fine, not exceeding ten per cent for each month in arrears, 
 for every dollar of dues or interest which a shareholder shall 
 refuse or neglect to pay at the time it is due. They shall also 
 have power to charge an entrance fee of not exceeding twenty- 
 five cents on every share of stock issued by the association. 
 
 7. Unpledged Shares, Withdrawal of Accumulations Upon. 
 
 Payment to Shareholders Withdratving. Proviso. Retir- 
 ing of Unpledged Shares. Determination by Lot. 
 SEC. 7. The accumulations upon unpledged shares may be 
 withdrawn, and the shares canceled after one month's written 
 notice of such intention filed with the secretary at or before a 
 
212 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 stated monthly meeting of the board. If filed before such meet- 
 ing, the one month's notice shall not be deemed to have com- 
 menced until the first regular meeting after the filing. The 
 withdrawing shareholder shall be paid the amount of the with- 
 drawal value of his accumulations as determined under the by- 
 laws, at the last distribution of profits before the notice of with- 
 drawal, together with all dues paid since such distribution, and 
 such interest on the value of the shares at the time of the last 
 distribution and on the dues thereafter paid, as the by-laws shall 
 determine, less any fines unpaid and a proportionate share of 
 any unadjusted loss ; provided, that at no time shall more than 
 one half the receipts of the association, and when the association 
 is indebted upon matured shares, no more than one third, shall 
 be applicable to the payment of withdrawing shareholders, with- 
 out the consent of the board of directors; and when the de- 
 mands of withdrawing shareholders exceed the moneys appli- 
 cable to their payment, they shall be paid in the order in which 
 their notices of withdrawal were filed with the secretary. The 
 board of directors may at their discretion, under rules made by 
 them, retire the unpledged shares of any series at any time 
 after four years from the date of their issue, by enforcing with- 
 drawals of the same; provided, that the shareholders whose 
 shares are to be retired shall be determined by lot, and that 
 they shall be paid the full value of their shares, less all fines and 
 proportionate part of any unadjusted loss. 
 
 8. Payment of Dues, When to Cease. Payment of Matured 
 
 Shares. Proportion of Receipts Applicable. 
 SEC. 8. When each unpledged share of a given series reaches 
 the value of two hundred dollars, all payment of dues thereon 
 shall cease, and the holder thereof shall be paid out of the funds 
 of the association two hundred dollars therefor, with such rate 
 of interest as shall be determined by the by-laws, from the time 
 the board of directors shall declare such share to have matured, 
 until paid ; but at no time shall more than om> third of the re- 
 ceipts of the association be applicable to the payment of matured 
 shares, without the consent of the board of directors. The order 
 of the payment of the matured shares shall be determined by 
 the board of directors. 
 
APPENDIX. 213 
 
 9. Loan of Accumulations to Members. Open Bidding. Per- 
 
 sons Bidding Highest to Receive Loan. Deduction of Pre- 
 mium. Right to Borrow Restricted. 
 
 SEC. 9. At each monthly stated meeting, immediately fol- 
 lowing the receipt of dues and interest, the board of directors 
 shall offer to members of the association desiring to borrow, all 
 accumulations applicable to that purpose; the same shall be 
 loaned in sums of two hundred dollars, the value of a matured 
 share, or a multiple thereof, or the fractional parts of one fourth 
 or one half thereof. If there shall be more than one member 
 desiring to borrow, their right to a loan shall be determined by 
 an open bidding of a premium per share ; the member bidding 
 the highest premium shall be entitled to the loan, upon giving 
 proper security. From the sum loaned shall be deducted at the 
 time of loaning the amount of the premium bid. The receiving 
 of such premium or interest paid on the loan shall not be 
 deemed a violation of the usury laws. No member or members 
 can borrow a larger sum than shall be equal to the matured 
 value of the shares held by him or them. A borrowing member 
 for each share or fractional part thereof borrowed upon, shall, 
 in addition to the dues on his shares, pay monthly interest on 
 his loan at the rate of six per cent per annum, or such lower 
 rate as the by-laws shall name, until the shares borrowed upon 
 reach the matured value of two hundred dollars each, or the 
 loan is repaid ; and when such matured value is reached, the 
 share shall cancel the loan upon it, and the proper surrenders 
 and acquittances be made. 
 
 10. Loans to be Secured by Bond and First Mortgage. Trans- 
 
 fer of Unpledged Shares to Secure Loan. Forfeiture of 
 Loan. Conditions of Bond and Mortgage. Repayment of 
 Loans. 
 
 SEC. 10. For every loan made, a bond secured by a first 
 mortgage upon unencumbered real estate shall be given, accom- 
 panied by a transfer and pledge to the association of the shares 
 borrowed upon, and all accumulations that have or shall accrue 
 thereon, as a collateral security for the repayment of the loan ; 
 or, in lieu of the mortgage, the borrower, or another, may trans- 
 fer and pledge to the association for the payment of the loan, 
 
214 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 unpledged shares, the withdrawal value of which under the by- 
 laws, at the time of such borrowing, shall exceed the amount 
 borrowed and interest thereon for six months. If the borrower 
 neglects to offer security satisfactory to the board of directors, 
 within the time provided by the by-laws, his right to the loan 
 shall be forfeited, and he shall be charged with one month's 
 interest, and all necessary expenses incurred, if any, under the 
 by-laws, in reference to his proposed loan. All bonds and mort- 
 gages given to the association shall be deemed conditioned upon 
 the performances of the provisions of this act relating to the 
 repayment of loans and interest thereon, and the by-laws of 
 the association, although the same may not be fully expressed 
 therein. A borrower may repay a loan, and all arrears of in- 
 terest and fines thereon, or one share thereof, that is, the sum 
 of two hundred dollars, at any stated monthly meeting, or at 
 any other time, but when not made at a stated meeting, he shall 
 pay interest up to the first monthly meeting after such payment. 
 He may repay his loan in full, thereby relieving his shares from 
 liability upon the pledge thereof, made to the association, or he 
 may, by a proper notice and direction as to the application, have 
 the withdrawal value of the shares borrowed upon, applied in 
 payment or part payment of his loan. 
 
 11. Arrearages of Members. Notice to Pay Same. Forfeiture 
 
 in Certain Cases. Withdrawal Value. 
 SEC. 11. Whenever any member shall be six months in ar- 
 rears in the payment of his dues upon unpledged shares, the 
 secretary shall give him notice thereof in writing and a state- 
 ment of his arrearages, by mailing the same to him at the last 
 post-office address given by him to the association, and if he 
 shall not pay the same at the next or second stated monthly 
 meeting thereafter, the board of directors may, at their option, 
 declare his shares forfeited ; and at the time of such forfeiture, 
 the withdrawal value thereof shall be determined and stated, 
 and the defaulting member shall be entitled to withdraw the 
 same without interest, within one year upon such notice as shall 
 be required of a withdrawing shareholder. 
 
APPENDIX. 215 
 
 12. Loan to Become Due when Borrowing Member is Six 
 
 Months in Arrears. Effect Thereof. 
 
 SEC. 12. Whenever a borrowing member shall be six months 
 in arrears in the payment of his dues and interest, or either, tho 
 whole loan shall become due at the option of the board of direct- 
 ors ; and they may proceed to enforce collection upon the se- 
 curities held by the association. The withdrawal value at the 
 time of the commencement of the action, of all shares pledged 
 as collateral security for the loan, shall be applied upon the 
 loan and arrearages of interest and fines thereon, and the shares 
 deemed surrendered to the association. 
 
 13. Purchase of Real Estate Held Under. Mortgage. 
 SEC. 13. Any association may purchase at any sale, public or 
 private, any real estate upon which it may have a mortgage, 
 judgment, lien or other incumbrance, or in which it may have 
 any interest ; and may sell, convey, lease, or mortgage the same 
 at pleasure to any person or persons. 
 
 14. Associations may Borrow Money for Paying Withdrawals, 
 etc. Loan of Surplus to other Associations. Proceedings 
 Therefor. 
 
 SEC. 14. Any association organized in pursuance of the pro- 
 visions of this act, may borrow money for the purpose of making 
 loans or paying withdrawals, not exceeding, however, two thou- 
 sand dollars, so long as its accumulated capital does not exceed 
 ten thousand dollars ; and not exceeding six thousand dollars, 
 so long as its accumulated capital shall be over ten thousand, 
 and does not exceed sixty thousand dollars ; and whenever its 
 accumulated capital exceeds sixty thousand dollars, it may bor- 
 row money for the purposes aforesaid not exceeding ten per cent, 
 of its accumulated capital. No money borrowed shall be for a 
 longer term than one year. Any association having a surplus 
 in its treasury, for which there is no demand for loans, with- 
 drawing shareholders or matured stock, may loan the same to 
 another association, organized under the provisions of this act, 
 subject to the provisions of this section, on the part of the bor- 
 rowing association. No association shall borrow or make loans 
 herein authorized, except by a two-thirds vote of its board of 
 
216 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 directors. The vote to be recorded by ayes and nays in its 
 regular minutes. 
 
 15. Profits and Losses, Distribution of. Manner of Distribu- 
 tion. Undistributed Profits. Reservation of Guarantee 
 Fund. 
 
 SEC. 15. Profits and losses shall be distributed at least an- 
 nually, and always before issuing a new series of stock to the 
 shares then outstanding. Profits and losses shall be distributed 
 to all shares, in all series outstanding at the time of such distri- 
 bution, in proportion to their holding value, as distinguished 
 from their withdrawing value, except that, in addition thereto 
 a distribution of not exceeding the amount of the entrance fee, 
 in the discretion of the board of directors, may be made to each 
 share outstanding in the last series issued prior to the distribu- 
 tion. At each periodical distribution of profits, the board of 
 directors may reserve and carry as undistributed profits, in the 
 nature of a guaranty fund, any sum from the net profits that in 
 their discretion seems wise, to be applied upon any future losses 
 that may occur from any cause whatsoever. 
 
 16. Transfer of Shares. How made. Transfer Fee. 
 SEC. 16. No transfers of shares shall be binding upon the 
 association until the same have been made upon the books of 
 the association ; and the transferee thereof shall take the same, 
 charged with all the liabilities and conditions attaching thereto 
 in the hands of the one transferring the same. The association 
 may require a " transfer fee " not exceeding twenty-five cents 
 per share. 
 
 17. By-Laws, Adoption of. Attorney for Association. 
 
 SEC. 17. The association as soon as duly incorporated shall 
 possess power to adopt by-laws, not inconsistent with the pro- 
 visions of this act, regulating the due conduct of the business 
 of the association, defining the duties of officers and commit- 
 tees, times of meetings, mode of determining and declaring the 
 withdrawing value of shares, and in relation to all other mat- 
 ters having reference to the conduct of the business, although 
 not specifically mentioned in this act. The board of directors 
 
APPENDIX. 217 
 
 shall have power to appoint and remove at pleasure, an attorney 
 for the association. 
 
 IS. Eligibility to Membership in Association. Accumulations, 
 how far Exempt. Associations Deemed Savings Institu- 
 tions. 
 
 SEC. 18. Any person of full age and sound mind may become 
 a member of the association by taking one or more shares there- 
 in, and subscribing the by-laws, and annexing to his signature 
 his post-office address; and whenever he desires his post-office 
 address changed, he shall give written notice thereof to the 
 secretary of the association ; and for the purpose of giving any 
 member notice, by mail, the last post-office address given by 
 him shall be deemed the proper one. A minor may hold shares 
 in the name of a parent, guardian, or next friend as trustee for 
 him. All accumulations upon shares in said association held by 
 any person shall be exempt from execution and proceedings 
 supplementary thereto, to the amount of six hundred dollars; 
 and the association itself shall be deemed an institution for 
 savings and not taxable under any corporation tax law which 
 shall exempt savings-banks, or institutions for savings from 
 taxation. 
 
 19. Annual Report to Bank Department. Further Reports. 
 SEC. 19. Every association organized under the provisions of 
 this act shall annually make a full report in writing of the 
 affairs and condition of such corporation on the first day of 
 January in each year to the Superintendent of the Bank Depart- 
 ment in such form and by such officers of the corporation as the 
 said superintendent may designate. Such report shall be verified 
 by the oath of the officers making the same. Every association 
 shall make any further reports which the said superintendent 
 shall require, and in such form, and as to such matters relating 
 to the condition and conducting of the business of the associa- 
 tion as such superintendent shall designate. Any willful false 
 swearing in making and verifying said reports shall be deemed 
 perjury. 
 
 15 
 
218 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 SO. Forfeiture for Failure to Report. Recovery of Penalty. 
 
 SEC. 20. If any such association shall fail to furnish to the 
 Superintendent of the Bank Department any report required by 
 this act, at the time so required, it shall forfeit the sum of ten 
 dollars per day for every day such report shall be delayed or with- 
 held ; and the Superintendent may maintain an action in his 
 name of office to recover such penalty, and the same shall be 
 paid into the treasury of the State and applied to the expenses 
 of the Bank Department. 
 
 21. Visitation by Bank Superintendent. 
 SEC. 21. All associations organized under the provisions of 
 this act shall be subject to the visitation and examination at all 
 times by the Superintendent of the Bank Department, his depu- 
 ties or duly appointed agents, upon the application of three or 
 more members of said association. If it shall appear to said 
 superintendent, from the report of any said association, or from 
 an examination made by him, his deputies or duly appointed 
 agents, that any such association is violating the provisions of 
 this act, or is conducting its business in an unsafe or unauthor- 
 ized manner, he shall by an order under his hand and seal ad- 
 dress to such association, direct the discontinuance of such 
 illegal and unsafe practices ; and whenever any association shall 
 neglect or refuse to comply with such order, or make reports as 
 required, he shall communicate such facts to the Attorney-Gen- 
 eral, who shall thereupon be authorized to institute proceedings 
 against any such association as is now, or may hereafter be 
 "provided for by law in the case of an insolvent incorporation, 
 or such other proceedings as the nature of the case may re- 
 quire. 
 
 22. Existing Loan and Accumulating Fund Associations, How 
 Entitled to Benefits of this Act. 
 
 SEC. 22. Any association now existing and heretofore incor- 
 porated under the-provisions of said chapter one hundred and 
 twenty-two of the laws of eighteen hundred and fifty-one, may 
 be entitled to the benefits of this act, on the majority vote of the 
 shareholders of said association, directing the making and filing 
 of the certificate mentioned in the third section of this act, and 
 
APPENDIX. 219 
 
 conforming the transaction of their business to the provisions 
 of this act. 
 
 28. Exemption. 
 
 SEC. 23. Associations organized under this act shall not be 
 subject to the provisions of chapter one hundred and forty- 
 three of the laws of eighteen hundred and eighty-six. 
 
 SEC. 24. This act shall take effect immediately. 
 
 CHAPTER 122, LAWS OF 1851. 
 
 An act for the incorporation of building, mutual loan, and ac- 
 cumulating fund associations. 
 
 Companies, How Formed. 
 
 SECTION 1. Any number of persons, not less than nine, may 
 associate and form an incorporated company for the purpose of 
 accumulating a fund for the purchase of real estate, the erection 
 of buildings, or the making of other improvements on lands, or 
 to pay off incumbrances thereon, or to aid its members in ac- 
 quiring real estate, making improvements thereon, and remov- 
 ing incumbrances therefrom ; and for the further purpose of 
 accumulating a fund to be returned to its members who do not 
 obtain advances as above mentioned, when the funds of such 
 association shall amount to a certain sum per share, to be speci- 
 fied in the articles of association. 
 
 Articles of Association. 
 
 SEC. 2. Such persons shall severally subscribe articles of as- 
 sociation, in which shall be set forth the name of the corpora- 
 tion, the time of its regular meetings, and how special meetings 
 may be called, and what shall constitute a quorum to transact 
 business at meetings ; the qualifications of members and how 
 constituted ; what officers, trustees, and attorney there shall be, 
 and how and when chosen, and their duties, and how removed 
 or suspended from office ; the entrance fee of new members and 
 new shares, the monthly or weekly dues per share, the redemp- 
 tion fee on shares on whicn advances shall be made, and fees to 
 be paid on the transfer of shares ; the fines and penalties for 
 
220 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the non-payment of dues or fees, or other violation of the articles 
 of association ; the manner of redemption of shares by advances 
 made thereon, the mortgaged security to be taken on such ad- 
 vances, and how the same may be redeemed or changed ; the 
 manner of the transfer or withdrawal of shares ; the manner of 
 investing funds not required for advances on shares ; the quali- 
 fications of voters at the meetings, and the mode of voting ; the 
 ultimate amount to be paid to the owners of unredeemed shares ; 
 the manner of altering or amending the articles of association, 
 and such other provisions as shall be necessary for the convenient 
 and effective transaction of the business thereof ; provided that 
 the same shall not in any respect contravene the Constitution or 
 laws of this State. 
 
 Copy of Articles when to be Filed. Powers and Limitations. 
 
 SEC. 3. A true copy of such articles, signed by the officers of 
 the association, together with a statement showing when the as- 
 sociation was organized, and the place of the transaction of its 
 business, and the names of the officers and trustees at the time 
 of the making of such statement, which shall be verified by oath 
 or affirmation before any officer authorized to take affidavits, to 
 be used in the courts of justice, shall be filed in the office of the 
 clerk of the county in which such association shall transact its 
 business ; and thereupon the persons who have subscribed the 
 articles of association as aforesaid, and such other persons as 
 shall become members of such association, and their successors, 
 shall be a body corporate by the name specified in such articles 
 of association, and shall possess the powers and privileges and 
 be subject to the provisions of title third of chapter eighteen of 
 the first part of the Revised Statutes, so far as those provisions 
 are consistent with the provisions of this act, and they shall, 
 by their corporate name, be capable in law of purchasing, hold- 
 ing and conveying any real and personal estate whatever, which 
 may be necessary to enable said company to carry on their 
 operation named in such certificate. 
 
 Calls upon Stock. 
 
 SEC. 4. It shall be lawful for the trustees to call in and de- 
 mand from the stockholders, respectively, all such sums of 
 
APPENDIX. 221 
 
 money by them subscribed, at such times and in such payments 
 or installments as the articles of association shall prescribe, un- 
 der the penalty of forfeiting the shares of stock subscribed for, 
 and all previous payments made thereon, if payment shall not 
 be made by the stockholder within sixty days after a personal 
 demand or notice requiring such payment shall have been pub- 
 lished for six successive weeks in the newspaper nearest to the 
 place where the business of the company shall be carried on as 
 aforesaid. 
 
 Borrowing Money. 
 
 SEC. 5. All corporations formed under this act shall have 
 power to borrow money for temporary purposes not inconsistent 
 with the objects of their organization; but no loan for such 
 purposes shall have a longer duration than two years, nor shall 
 such indebtedness exceed at any one time one fourth of the 
 aggregate amount of the shares and parts of shares, and the in- 
 come thereof, actually paid in and received. 
 
 Stock for Minors, etc. 
 
 SEC. 6. Parents and guardians may take and hold shares in 
 such association in behalf and for the use of their minor chil- 
 dren or wards, provided the cost of such shares be defrayed 
 from the personal earnings of such minor children or wards, or 
 by gifts from persons other than their male parents ; married 
 women may take and hold shares in such associations, provided 
 the cost of such shares be defrayed from their personal earnings, 
 the personal earnings of their children voluntarily bestowed for 
 this purpose, or from property bequeathed or given to them by 
 persons other than their husbands. 
 
 Dividends ; Monthly Payments. 
 
 SEC. 7. The trustees of any association formed under the 
 provisions of this act may, from time to time, declare dividends 
 from the earnings of the association, payable in such manner as 
 may be provided in the articles of association ; but no dividend 
 shall be declared, except from the earnings of the association, 
 and if the trustees of any such association shall declare and pay 
 any dividend when the company is insolvent, or any dividend, 
 the payment of which would render it insolvent, they shall be 
 
222 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 jointly and severally liable to the extent of the dividend so de- 
 clared and paid, for all the debts of the association then exist- 
 ing or that shall be thereafter contracted while they shall 
 respectively continue in office; provided, that if any of the 
 trustees shall object to the declaring of such dividend or to the 
 payment of the same, and shall, at any time before the time 
 fixed for the payment thereof, file a certificate of his objection 
 in writing with the clerk of the company, and with the clerk of 
 the county, he shall be exempt from the said liability. But no 
 trustee who shall be present at any meeting when such dividend 
 is declared, shall be exempt from such liability, unless he shall 
 then and there object to the declaration or payment of such 
 dividend, and shall also procure his objection to be noted in the 
 book of minutes of such association. No holder of redeemed 
 shares shall claim to be exempt from making the monthly 
 or other stated payments provided in the articles of association, 
 upon the ground that by reason of losses or otherwise, the asso- 
 ciation has continued longer than was originally anticipated, 
 whereby the payments made on such shares may amount to 
 more than the amount originally advanced, with legal interest 
 thereon ; nor shall the imposition of fines for the non-payment 
 of dues or fees, or other violation of the articles of association, 
 nor shall the making of any monthly payment required by the ar- 
 ticles of association, or of any premium for loans made to mem- 
 bers be deemed a violation of the provision of any statute against 
 usury. (Thus amended by ch. 564 of the Laws of New York, 1875.) 
 
 Existing Associations, How Entitled to Benefit of this Act. 
 
 SEC. 8. Any existing association formed for the purposes 
 mentioned in the first section of this act, may, on the vote of 
 the majority of the voting shares, at any regular meeting after 
 the passage of this act, become entitled to the benefit of this 
 act, on complying with the second and third sections thereof, 
 unless the second section has heretofore been complied with ; in 
 which case it shall be necessary to comply only with the said 
 third section. 
 
 Embezzlement, How Punished. 
 
 SEC. 9. No officer, trustee, attorney, agent or servant of any 
 association hereby incorporated, shall use or dispose of any part 
 
APPENDIX. 223 
 
 of the funds of such association, or assign, transfer, cancel or 
 deliver up or acknowledge satisfaction of any bond, mortgage 
 or other written instrument belonging to such association, un- 
 less duly authorized, or be guilty of any fraud in the perform- 
 ance of his duties ; and every person guilty of a violation of 
 this section shall be liable civilly to the party injured, to the 
 extent of the damage thereby incurred, and shall also be liable 
 to an indictment for a misdemeanor, punishable by fine or im- 
 prisonment, or both, in the discretion of the court by which he 
 shall be tried. 
 
 Annual Report to be Published. 
 
 SEC. 10. Each association formed under the provisions of 
 this act shall, at the close of the first year's operations, and an- 
 nually at the same period in each year thereafter, publish in at 
 least two newspapers published in the same place where their 
 business may be located, or if no newspapers shall be published 
 in such place, then in any two newspapers published nearest 
 such place, a concise statement verified on the oaths of its presi- 
 dent and secretary, showing the actual financial condition of 
 the association, and the amount of its property and liabilities, 
 specifying the same particularly. 
 
 Liability of Stockholders and Directors. 
 SEC. 11. All the shareholders of any association formed un- 
 der this act, shall be individually liable to the creditors of said 
 association, to an amount equal to the amount of stock held by 
 them respectively, for all debts contracted by such association. 
 The directors or other officers of every association formed under 
 this act, shall be personally liable for any fraudulent use, dis- 
 position or investment of any moneys or property belonging to 
 such association, or for any loss which shall be incurred by any 
 investment made by such directors or other officers, other than 
 such as are mentioned in and authorized by this act ; but no 
 director or other officer of any such association shall be liable as 
 aforesaid ; except he authorized, sanctioned, approved or made 
 such fraudulent use, disposition or investment as aforesaid. 
 
224: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Liabilities of Trustees. 
 
 SEC. 12. No person holding stock in any such company, or 
 executor, administrator, guardian or trustee, and no person 
 holding such stock as collateral security, shall be personally sub- 
 ject to any liability as stockholder of such company ; but the 
 person pledging such stock shall be considered as holding the 
 same, and shall be liable as a stockholder accordingly ; and the 
 estate and funds in the hands of such executor, administrator, 
 guardian or trustee, shall be liable in like manner and to the 
 same extent as the testator, or intestate or the ward or person 
 interested in such trust fund would have been if he had been 
 living and competent to act and hold the same stock in his own 
 name. 
 
 Right of Voting. 
 
 SEC. 13. Every such executor, administrator, guardian or 
 trustee, shall represent the share of stock in his hands at all 
 meetings of the company, and may vote accordingly as a stock- 
 holder ; and every person who shall pledge his stock as afore- 
 said may, nevertheless, represent the same at all such meetings 
 and may vote accordingly as a stockholder. 
 
 Election of Officers. 
 
 SEC. 14. In case it shall happen at any time that an election 
 of officers shall not be made on the date designated by the by- 
 laws of said company, when it ought to have been made, the 
 company for that reason shall not be dissolved ; but it shall be 
 lawful on any other day to hold an election for trustees in such 
 manner as shall be provided for by the said by-laws ; and all 
 acts of trustees shall be valid and binding as against such com- 
 pany until their successors shall be elected. 
 
 Power to Repeal or Alter. 
 
 SEC. 15. The legislature may at any time alter, amend or 
 repeal this act, or may annul or repeal any incorporation formed 
 or created under this act ; but such amendment or repeal shall 
 not, nor shall the dissolution of any such company take away or 
 impair any remedy given against any such corporation, its stock- 
 holders or officers, for any liability which shall have been previ- 
 ously incurred. 
 
APPENDIX. 225 
 
 Capital Stock, how Increased or Diminished. 
 SEC. 16. Any company which may be formed under this act 
 may increase or diminish its capital stock, by complying with 
 the provisions of this act, to any amount which may be deemed 
 sufficient and proper for the purposes of the corporation ; but 
 before any corporation shall be entitled to diminish the amount 
 of its capital stock, if the amount of its debts and liabilities shall 
 exceed the amount of capital to which it is proposed to be re- 
 duced, such amount of debts and liabilities shall be satisfied and 
 reduced so as not to exceed such diminished amount of capital. 
 
 Notice of Meeting. 
 
 SEC. 17. Whenever any company shall desire to call a meet- 
 ing of the stockholders for the purpose of increasing or dimin- 
 ishing the amount of its capital stock, it shall be the duty of the 
 trustees to publish a notice signed by at least a majority of them 
 in a newspaper in the county, if any shall be published therein, 
 at least three successive weeks, and to deposit a written or printed 
 copy thereof in the post-office, addressed to each stockholder at 
 his usual place of residence, at least three weeks previous to the 
 day fixed upon for holding such meeting, specifying the object 
 of the meeting, the time and place where and when such meet- 
 ing shall be held, and the amount to which it shall be proposed 
 to increase or diminish the capital, and a vote of at least two 
 thirds of all the shares of stock shall be necessary to an increase 
 or diminution of the amount of its capital stock. 
 
 Meeting, how Organized and Conducted. 
 SEC. 18. If at any time and place specified in the notice pro- 
 vided for in the preceding section of this act stockholders shall 
 appear in person or by proxy, in numbers representing not less 
 than two thirds of all the shares of stock of the corporation, 
 they shall organize by choosing one of the trustees chairman of 
 the meeting, and also a suitable person for secretary, and pro- 
 ceed to a vote of those present in person or by proxy ; and if on 
 canvassing the votes it shall appear that a sufficient number of 
 votes has been given in favor of increasing or diminishing the 
 amount of capital, a certificate of the proceeding, showing a 
 compliance with the provision of this act, the amount of the capi- 
 
226 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 tal actually paid in, the whole amount of debts and liabilities of 
 the company, and the amount to which the capital stock shall 
 be increased or diminished, shall be made out, signed, and veri- 
 fied by the affidavit of the chairman and be countersigned by 
 the secretary ; and such certificate shall be acknowledged by the 
 chairman and filed as required by the first section of this act, 
 and when so filed the capital stock of such corporation shall be 
 increased or diminished to the amount specified in such certifi- 
 cate. 
 
 Exemption. 
 
 SEC. 19. The shares held by the members of all associations 
 incorporated under the provisions of this act shall be exempt 
 from sale on execution for debt to an extent not exceeding six 
 hundred dollars in such shares at their par value. 
 
 Loan to Members. 
 
 SEC. 20. No loan made by any such association to any of its 
 members may exceed in amount the par value of the capital 
 stock for which such member may have subscribed. 
 
 Certificate, how made Evidence. 
 
 SEC. 21. The copy of any certificate of incorporation, filed in 
 pursuance of this act, certified by the county clerk or his deputy 
 to be a true copy and of the whole of such certificate, shall be 
 received in all courts and places as presumptive legal evidence 
 of the facts therein stated. 
 
 CHAPTER 564, LAWS OF 1875. 
 
 An act to amend chapter one hundred and twenty-two of the 
 laws of eighteen hundred and fifty-one, entitled "An act 
 for the incorporation of building, mutual loan, and accu- 
 mulating fund associations." 
 
 (SECTION 1 amends SEC. 7, ch. 122, of the Laws of 1851.) 
 
 To make Annual Reports. 
 
 SEC. 2. Every corporation organized under the provisions of 
 this act, and every corporation heretofore organized under the 
 
APPENDIX. 227 
 
 laws of this State for purposes similar to those provided for in 
 said act, shall annually make a full report in writing of the af- 
 fairs and condition of such corporation, on the first day of Janu- 
 ary in each year, to the Superintendent of the Banking Depart- 
 ment, in such form and by such officers of the corporation as the 
 said Superintendent may designate, which report shall be in 
 place of any report which any such corporation may now be re- 
 quired to make to the supreme court, the comptroller, or other- 
 wise. Such report shall be verified by the oath or affirmation of 
 the officers making such report ; and any willful false swearing 
 in regard to such report shall be deemed perjury and be subject 
 to the prosecutions and punishments prescribed by law for that 
 offense. Every such report shall be made within twenty days 
 after the day to which it relates, and shall be in such form and 
 contain such statements, returns, and information, as to the 
 affairs, business, condition, obligations and resources of such 
 corporation as the said Superintendent may from time to time 
 prescribe and require ; and the said Superintendent may, if he 
 be of the opinion that it is desirable, require that a like report, 
 either wholly or in part as to the particulars aforesaid, be made 
 to him at any time by any such corporation aforesaid within 
 such period as he may designate. 
 
 Examination of Affairs of Corporations. 
 SEC. 3. Whenever the stockholders of any corporation organ- 
 ized under the provisions of this act shall deem that a personal 
 examination by said superintendent of the affairs of said cor- 
 poration is desirable or necessary, it shall be the duty of said 
 superintendent, on the request in writing, signed by not less 
 than five of the stockholders of said corporation, that such ex- 
 amination be made either by himself or by some person duly 
 appointed by him for that purpose, to make a full and careful 
 examination of the affairs of said corporation, and make his 
 report thereon, as herein provided. The person making such 
 examination shall have power to administer oaths and take all 
 testimony by him deemed necessary and proper and to compel the 
 attendance of witnesses and the production of books and papers, 
 by like process and in the same manner as now provided by law 
 to procure the attendance of witnesses and the production of 
 
228 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 books and papers in the courts of record in this State. The 
 expense of such examination shall be borne by said corporation, 
 but no charge shall be made therefor, when the examination is 
 made by said superintendent personally or by one of the salaried 
 employes of his department, except for necessary traveling and 
 other expenses ; whenever said superintendent shall appoint any 
 person other than a salaried officer in his department to make 
 such examination, the amount charged therefor shall not exceed 
 the sum of ten dollars per day for the time actually expended 
 in making the same, and the actual and necessary expenses as 
 hereinbefore provided. (Thus amended by ch. 96, Laws of 1878.) 
 
 Nature of Examination. 
 
 SEC. 4. On every such examination inquiry shall be made as 
 to the condition and resources of the corporation generally, the 
 mode of conducting arid managing its affairs, the action of its 
 directors or trustees, the investment of its funds, the safety and 
 prudence of its management, the security afforded to those by 
 whom its engagements are held, and whether the requirements 
 of its charter and of law have been complied with in the admin- 
 istration of its affairs. 
 
 When found to be Violating Charter, Proceedings by Attorney- 
 General. 
 
 SEC. 5. If it shall appear to the said Superintendent from 
 the report of any such corporation, or from any examination 
 made by him, or from the report of any examination made 
 to him, that any corporation has committed a violation of 
 its charter or of law, or is conducting business in an unsafe 
 or unauthorized manner, he shall by an order under his hand 
 and seal of office, addressed to such corporation, direct the dis- 
 continuance of such illegal or unsafe practices and conformity 
 with the requirements of its charter and of law, and with safety 
 and security in its transactions, and whenever any corporation 
 shall refuse or neglect to make such report as is hereinbefore 
 required, or to comply with any such order as aforesaid; or 
 whenever it shall appear to the superintendent that it is unsafe 
 or inexpedient for any corporation to continue to transact busi- 
 ness, he shall communicate the facts to the attorney-general, 
 
APPENDIX. 229 
 
 who shall thereupon be authorized to institute such proceedings 
 against any such corporation as are now, or may hereafter be 
 provided for by law in the case of insolvent corporations, or such 
 other proceedings as the nature of the case may require. 
 
 Penalty for Failure to Report. 
 
 SEC. 6. If any such corporation shall fail to furnish to the 
 superintendent of the banking department any report or state- 
 ment required by this act, at the time so required, it shall for- 
 feit the sum of ten dollars per day for every day such report or 
 statement shall be so delayed or withheld ; and the said super- 
 intendent may maintain an action in his name of office to recover 
 such penalty, and, when collected, the same shall be paid into the 
 treasury of the State and be applied to the expenses of the bank 
 department. 
 
 PENNSYLVANIA. 
 
 LAWS OF PENNSYLVANIA RELATING TO BUILDING AND 
 LOAN ASSOCIATIONS. 
 
 Section one of the general law of Pennsylvania, relating to the 
 incorporation of certain corporations, passed in 1874, provides : 
 Sec. 1. " Be it enacted, etc., that corporations may be formed 
 under the provisions of this act by the voluntary association of 
 five or more persons for the purposes and in the manner men- 
 tioned herein." Then follows the classification of such corpo- 
 rations and the mode of their incorporation. Section 37 of said 
 general act relates to building and loan associations, and pro- 
 vides as follows : 
 
 SECTION 37. Building and loan associations incorporated 
 under the provisions of this act shall have the powers, and, from 
 the date of the letters-patent creating the same, when not other- 
 wise provided in this act, be governed, managed and controlled 
 as follows : 
 
 CLAUSE 1. They shall have the power and franchise of 
 loaning or advancing to the stockholders thereof the moneys 
 accumulated, from time to time, and the power and right to 
 secure the repayment of such moneys, and the performance of 
 
230 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the other conditions upon which the loans are to be made, by 
 bond and mortgage or other security, as well as the power and 
 right to purchase or erect houses, and to sell, convey, lease or 
 mortgage the same at pleasure to their stockholders, or others 
 for the benefit of their stockholders, in such a manner also that 
 the premiums taken by the said association, for the preference 
 or priority of such loans, shall not be deemed usurious ; and so 
 also that in case of non-payment of the installments, premiums 
 or interest by borrowing stockholders, for six months, payment 
 of principal, premiums and interest, without deducting the pre- 
 mium paid, or interest thereon, may be enforced by proceeding 
 on their securities according to law. 
 
 CLAUSE 2. The capital stock of any corporation created 
 for such purposes, by virtue of this act, shall at no time consist 
 in the aggregate of more than one million dollars, to be divided 
 into shares of such denomination, not exceeding five hundred 
 dollars each, and in such numbers as the corporators may, in 
 the application for their charter, specify : Provided, That the 
 capital stock may be issued in series, but no such series shall at 
 any issue exceed in the aggregate five hundred thousand dol- 
 lars, the installments on which stock are to be paid at such time 
 and place as the by-laws shall appoint ; no periodical payment 
 of such installments to be made exceeding two dollars on each 
 share, and said stock may be paid off and retired as the by-laws 
 shall direct ; every share of stock shall be subject to a lien for 
 the payment of unpaid installments and other charges incurred 
 thereon under the provisions of the charter and by-laws, and 
 the by-laws may prescribe the form and manner of enforcing 
 such lien ; new shares of stock may be issued in lieu of the 
 shares withdrawn or forfeited ; the stock may be issued in one 
 or in successive series, in such amount as the board of directors 
 or the stockholders may determine ; and any stockholder wish- 
 ing to withdraw from the said corporation shall have power to 
 do so, by giving thirty days' notice of his or her intention to 
 withdraw, when he or she shall be entitled to receive the 
 amount paid in by him or her, less all fines and other charges ; 
 but after the expiration of one year from the issuing of the 
 series, such stockholder shall be entitled, in addition thereto, to 
 legal interest thereon : Provided, That at no time shall more 
 
APPENDIX. 
 
 than one half of the funds in the treasury of the corporation be 
 applicable to the demands of withdrawing stockholders, without 
 the consent of the board of directors, and that no stockholder 
 shall be entitled to withdraw, whose stock is held in pledge for 
 security. Upon the death of a stockholder, his or her legal 
 representatives shall be entitled to receive the full amount paid 
 in by him or her, and the legal interest thereon, first deducting 
 all charges that may be due on the stock ; no fines shall be 
 charged to a deceased member's account, from and after his or 
 her decease, unless his legal representatives of such decedent 
 assume the future payments on the stock. 
 
 CLAUSE 3. The number, titles, function and compensation 
 of the officers of any such corporation, their terms of office, the 
 times of their elections, as well as the qualifications of electors, 
 and the ratio and manner of voting, and the periodical meetings 
 of the said corporation, shall be determined by the by-laws, when 
 not provided by this act. 
 
 CLAUSE 4. The said officers shall hold stated meetings, at 
 which the money in the treasury, if over the amount fixed by 
 the charter as the full value of a share, shall be offered for loan, 
 in open meeting, and the stockholder who shall bid the highest 
 premium for the preference or priority of loan, shall be entitled 
 to receive a loan of not more than the amount fixed by charter 
 as the full value of a share, for each share of stock held by such 
 stockholder: Provided, That a stockholder may borrow such 
 fractional part of the amount fixed by charter as the full value 
 of a share, as the by-laws may provide ; good and ample secur- 
 ity, as prescribed by the by-laws of the corporation, shall be 
 given by the borrower, to secure the repayment of the loan, in 
 case the borrower shall neglect to offer security, or shall offer 
 security that is not approved by the directors, by such time as 
 the by-laws may prescribe, he or she shall be charged with legal 
 interest, together with any expenses incurred, and the loss in 
 premium, if any, on a resale, and the money may be resold at 
 the next stated meeting ; in case of non-payment of install- 
 ments or interest by borrowing stockholders, for the space of 
 six months, payment of principal and interest, without deduct- 
 ing the premium paid or interest thereon, may be enforced, by 
 proceeding on their securities according to law. 
 
232 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS, 
 
 CLAUSE 5. A borrower may repay a loan at any time, and 
 in case of the repayment thereof, before the expiration of the 
 eighth year, after the organization of the corporation, there 
 shall be refunded to such borrower one eighth of the premium 
 paid for every year of the said eight years then unexpired : 
 Provided, When the stock is issued in separate series the time 
 shall be computed from the date of the issuing the series of 
 stock on which the loan was made. 
 
 CLAUSE 6. No premiums, fines, or interest on such pre- 
 miums, that may accrue to the said corporation, according to 
 the provisions of this act shall be deemed usurious ; and the 
 same may be collected as debts of like amount are now by law 
 collected in this commonwealth. 
 
 CLAUSE 7. No corporation or association created under this 
 act shall cease or expire from neglect on the part of the corpo- 
 rators to elect officers at the time mentioned in their charter or 
 by-laws ; and all officers elected by such corporation shall hold 
 their offices until their successors are duly elected. 
 
 CLAUSE 8. Any loan or building association incorporated 
 by or under this act, is hereby authorized and empowered to 
 purchase, at any sheriff's or other judicial sale, or at any other 
 sale, public or private, any real estate, upon which such asso- 
 ciation may have or hold any mortgage, judgment, lien, or 
 other incumbrance, or ground-rent, or in which said association 
 may have an interest, and the real estate so purchased, or any 
 other that such association may hold or be entitled to at the 
 passage of this act, to sell, convey, lease, or mortgage, at pleas- 
 ure, to any person or persons whatsoever ; and all sales of real 
 estate heretofore made by such associations to any person or 
 persons not members of the association so selling, are hereby 
 confirmed and made valid. 
 
 CLAUSE 9. All such corporations shall have full power to 
 purchase lands and to sell and convey the same, or any part 
 thereof, to their stockholders or others in fee simple, with or 
 without the reservation of ground-rents; but the quantity of 
 land purchased by any one of said associations hereafter incor- 
 porated, shall not, in the whole, exceed fifty acres ; and in all 
 cases the land shall be disposed of within ten years from the 
 date of the incorporation of such associations respectively. 
 
APPENDIX. 233 
 
 CLAUSE 10. All land and building associations are hereby 
 authorized to make sale of, and assign or extinguish, to any 
 person or persons, the ground-rents created as aforesaid. 
 
 The foregoing general act was amended by No. 14 of the 
 Laws of Pennsylvania, for the year 1879, which is as follows : 
 
 No. 14. 
 
 An act relating to mutual savings-fund, building, and loan asso- 
 ciations, regulating the mode of charging premiums, bonus 
 or interest in advance, of withdrawals, of repayment and 
 collection of loans ; also restricting the power to levy ex- 
 cessive fines, and defining the rights and liabilities of mar- 
 ried women stockholders, and prescribing the non-applica- 
 tion to these associations of the bonus tax and registry laws 
 for corporations. 
 
 SECTION 1. Be it enacted, etc., That it shall be lawful for any 
 mutual savings-fund, or building and loan association, now in- 
 corporated or hereafter to be incorporated, in addition to dues 
 and interest, to charge and receive the premium or bonus bid by 
 a stockholder for preference or priority of right to a loan in 
 periodical installments ; and such premium or bonus so paid in 
 installments shall not be deemed usurious, but shall be taken to 
 be a payment as it falls due, in contradistinction to a premium 
 charged and paid in advance ; and in so far as said premium or 
 bonus so charged and paid, in addition to dues and interest, 
 shall be in excess of two dollars for each periodical payment, the 
 same shall be lawful, any law, usage, or custom to the contrary 
 notwithstanding. It shall also be lawful for any mutual sav- 
 ings-fund or building and loan association to charge and deduct 
 interest in advance, in lieu of premiums for preference or pri- 
 ority of right to a loan : Provided, That the certificate of incor- 
 poration of each association hereafter to be incorporated, and 
 the certificate provided in section nine of this act for those in- 
 corporated, shall set forth whether the premium or bonus bid 
 for the prior right to a loan shall be deducted therefrom in ad- 
 vance or paid in periodical installments, or whether interest in 
 advance shall be deducted from the loan in lieu of premium 
 or bonus. 
 
 10 
 
234 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 SEC. 2. Stockholders withdrawing voluntarily shall receive 
 such proportion of the profits of the association or such rate of 
 interest as may be prescribed by the by-laws, any law or usage 
 to the contrary notwithstanding ; but payment of the value of 
 stock so withdrawn shall only be due when the funds now ap- 
 plicable by law to the demand of withdrawing stockholders are 
 sufficient to meet and liquidate the same, and then only in the 
 order of the respective times of presentation of the notices of 
 such withdrawals, which must have been presented in writing 
 at a previous stated meeting, and have been then and there in- 
 dorsed as to times of presentation by the officer designated by 
 the by-laws of the association. 
 
 SEC. 3. The by-laws may provide for the involuntary with- 
 drawal and cancellation at or before the maturity of shares of 
 stock not borrowed on : Provided, That such withdrawal and 
 cancellation shall be pro rata among the shares of the tame 
 series of stock : And provided further, That not less than legal 
 interest shall be credited and allowed to each share so with- 
 drawn and canceled. 
 
 SEC. 4. A borrower may repay a loan at any time, and in 
 case of the repayment thereof before the maturity of the shares 
 pledged for said loan, there shall be refunded to such borrower 
 (if the premiums, bonus, or interest shall have been deducted in 
 advance), such proportions of the premiums, bonus, or advance 
 interest bid, as the by-laws may determine: Provided, That in 
 no case shall the association retain more than one one hundredth 
 of said premiums or bonus for each calender month that has ex- 
 pired since the date of the meeting upon which the loan was 
 made, or if the interest in advance, it shall retain only the in- 
 terest due on the loan up to the time of settlement : And fur- 
 ther pi'ovided, That such borrower shall receive the withdraw- 
 ing value of the shares pledged for said loan, and the shares 
 shall revert back to the association. 
 
 SEC. 5. In case of non-payment of installments of stock, pre- 
 miums, dues, or interest, by borrowing stockholders, for the 
 space of six months, payment of the same, together with the 
 full principal of the loan, may be enforced by proceeding on 
 their securities according to law ; and the moneys so recovered 
 shall be paid into the treasury of the association for such uses 
 
APPENDIX. 235 
 
 (loans or otherwise) as may be deemed proper by the associa- 
 tion ; and if the said moneys so recovered, together with the 
 withdrawal value of the shares of such defaulting borrower, 
 shall exceed the amount it would have required, according to 
 the preceding section, to have voluntarily repaid the loan, to- 
 gether with all the expenses incurred by the association, such 
 excess shall be repaid to such defaulting borrower. 
 
 SEC. 6. Fines or penalties for the non-payment of install- 
 ments of dues, interest, and bonus or premium, shall not exceed 
 two per centum per month on all arrearages. 
 
 SEC. 7. It shall be lawful for any married woman of full age 
 to hold stock in any of said saving-funds, building, or loan asso- 
 ciations ; and, as such stockholder, she shall have all the rights 
 and privileges of other members, including the right to borrow 
 money from said associations and bid premiums therefor, and 
 shall also have the right and power to secure such loan by 
 transferring her said stock or other securities to said association 
 from which the same was borrowed, or by executing bond and 
 mortgage upon her separate real estate to secure said loan : 
 Provided, however, that the husband of such married woman 
 join in the execution of such bond and mortgage; and such 
 married woman shall also have the right to sell, assign, and 
 tranfer her said stock or withdraw the same, without joining 
 the husband in such transfer or withdrawal ; and it shall be 
 lawful for any such savings-fund, building, or loan association 
 to collect such loan made to such married woman, including the 
 dues, interest, premium and fines, as loans are made by such 
 associations to other members as are now by law collected, arid 
 such stock or interest in such stock shall not be liable for the 
 debts of any husband of such married woman. 
 
 SEC. 8. The bonus or tax due to the commonwealth upon 
 the capital stock of corporations, as provided for by the act of 
 the first of May, one thousand eight hundred and sixty-eight, 
 or by any other act, shall not apply to or be due from mutual 
 savings-fund, or building and loan associations ; nor shall the 
 registry for corporations, prescribed by the first section of the 
 act of first of May, one thousand eight hundred and sixty-eight, 
 the first section of the act of twenty-fourth of April, one thou- 
 sand eight hundred and seventy-four, and the twenty-sixth sec- 
 
236 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 tion of the act of twenty-ninth of April, one thousand eight 
 hundred and seventy-four, apply to or be required of mutual 
 savings-fund, or building and loan associations. 
 
 SEC. 9. Mutual savings-fund, or building and loan associa- 
 tions, heretofore incorporated under the provisions of any law, 
 shall be entitled to all the privileges, immunities, franchises, 
 and powers conferred by this act, upon filing with the secre- 
 tary of the commonwealth a certificate of their acceptance of 
 the same in writing, under the duly authenticated seal of said 
 association, which certificate also shall prescribe their mode or 
 plan of charging premiums, bonus, or advance interest, as set 
 forth in the first section of this act ; and upon such acceptance 
 and approval thereof by the governor, he shall issue letters 
 patent to said corporation reciting the same. 
 
 SEC. 10. All laws or parts of laws inconsistent with the pro- 
 visions of the act are hereby repealed. 
 
 MASSACHUSETTS. 
 
 The following is the law of this State, as reported by the 
 Commissioners of Savings-Banks, December 31, 1887 : 
 
 SECTION I. Twenty-five or more persons who associate them- 
 selves together by an agreement in writing, with the intention 
 of forming a corporation for the purpose of accumulating the 
 savings of its members paid into such corporation in fixed peri- 
 odical installments, and lending to its members the funds so 
 accumulated, shall be and remain a corporation upon complying 
 with the provisions of the three following sections : 
 
 SEC. 2. The agreement shall set forth the fact that the sub- 
 scribers thereto associated themselves with the intention of 
 forming a corporation; the name by which the corporation 
 shall be known ; the purpose for which it is formed ; the town 
 or city, which shall be within this Commonwealth, in which it is 
 located ; and the limit of the capital to be accumulated. 
 
 SEC. 3. The name shall be one not previously in use by any 
 existing corporation established under the laws of this Common- 
 wealth, and shall be changed only by act of the General Court. 
 
APPENDIX. 237 
 
 The words "co-operative savings-fund and loan association" 
 shall form a part of the name. 
 
 Section three of chapter one hundred and seventeen of the 
 Public Statutes, relative to the name of co-operative savings-fund 
 and loan associations, is hereby amended by striking out the 
 words " co-operative savings-fund and loan association," in the 
 fourth line, and inserting in place thereof the words " co-opera- 
 tive bank." 
 
 The title of said chapter one hundred and seventeen of the 
 Public Statutes is hereby amended by striking out the words 
 "savings-fund and loan associations," and inserting in place 
 thereof the word " banks." 
 
 The names of all co-operative savings-fund and loan associa- 
 tions heretofore organized are hereby changed by striking out 
 in each the words "savings-fund and loan association," and in- 
 serting in place thereof the word " bank " ; and they shall here- 
 after be known as '' co-operative banks." 
 
 The first and second sections of this act shall take effect 
 upon its passage, and the third section upon the first day of 
 July, in the year eighteen hundred and eighty-three. 
 
 SEC. 4. The provisions of sections eighteen, twenty, and 
 twenty-one of chapter one hundred and six shall apply to such 
 corporations, except that, in the certificate signed by the Secre- 
 tary of the Commonwealth, the limit of capital to be accumu- 
 lated, as fixed in the agreement of association, shall be inserted, 
 instead of the amount of the capital, that the certificate required 
 by said section twenty-one to be filed and recorded may be 
 signed and sworn to by the presiding and financial officers, and 
 a majority at least of the officers possessing the powers of direct- 
 ors by whatever name they may be called, and that the fees to 
 be paid for filing and recording the certificates required by said 
 section twenty-one, including the issuing of the certificate of 
 organization, shall be five dollars. 
 
 SEC. 5. The capital to be accumulated shall not exceed one 
 million dollars, and shall be divided into shares of the ultimate 
 value of two hundred dollars each. The limitation of capital to 
 be accumulated in any co-operative bank now organized or here- 
 after formed under the provisions of chapter one hundred and 
 seventeen of the Public Statutes shall be held to apply to capi- 
 
238 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 tal actually paid in, and no such bank shall be restrained from 
 issuing shares so long as the capital actually paid in on shares 
 is not in excess of one million dollars. The shares may be issued 
 in quarterly, half-yearly, or yearly series, in such amounts and 
 at such times as the members may determine. No person shall 
 hold more than twenty-five shares in the capital of any one such 
 corporation. No shares of a prior series shall be issued after 
 the issue of a new series. 
 
 SEC. 6. The number, title, duties, and compensation of the 
 officers of the corporation, their terms of office, the time of 
 their election, as well as the qualifications of electors and the 
 time of each periodical meeting of the officers and members, 
 shall be determined by the by-laws ; but no member shall be en- 
 titled to more than one vote at any election. All officers shall 
 continue in office until their successors are duly elected, and no 
 corporation shall expire from neglect on its part to elect officers 
 at the time prescribed by the by-laws. 
 
 In any co-operative bank now or hereafter formed under the 
 provisions of chapter one hundred and seventeen of the Public 
 Statutes, the offices of secretary and treasurer may be held by 
 one and the same person. 
 
 SEC. 7. The officers shall hold stated monthly meetings. At 
 or before each of these meetings every member shall pay to the 
 corporation, as a contribution to its capital, one dollar as dues 
 upon each share held by him until the share reaches the ulti- 
 mate value of two hundred dollars or is withdrawn, canceled 
 or forfeited. Payment of dues on each series shall commence 
 from its issue. 
 
 SEC. 8. A member may withdraw his unpledged shares at 
 any time by giving thirty days' notice of his intention so to do, 
 written in a book held and provided by the corporation for that 
 purpose. Upon such withdrawal the shareholder's account shall 
 be settled as follows : From the amount then standing to the 
 credit of the shares to be withdrawn there shall be deducted all 
 fines, a proportionate part of any unadjusted loss, together with 
 such proportion of the profits previously credited to the shares 
 as the by-laws may provide, and such shareholders shall be paid 
 the balance : Provided, that at no time shall more than one half 
 of the funds in the treasury be applicable to the demands of with- 
 
APPENDIX. 239 
 
 drawing members without the consent of the directors. The di- 
 rectors may at their discretion, under rules made by them, retire 
 the unpledged shares of any series at any time after four years from 
 the date of their issue by enforcing the withdrawal of the same ; 
 but whenever there shall remain in any series, at the expiration 
 of five years after the date of its issue, an excess above one hun- 
 dred unpledged shares, then it shall be the duty of the directors 
 to retire annually twenty-five per centum of such excess existing 
 at said expiration of five years after the date of its issue, so that 
 not more than one hundred unpledged shares shall remain in 
 such series at the expiration of nine years from the date of its 
 issue, and thereafter the directors may in their discretion retire 
 such other unpledged shares as they consider the best interests 
 of the bank to require : Provided, that whenever under the pro- 
 visions of this section the withdrawal of shares is to be enforced 
 the shares to be retired shall be determined by lot, and the hold- 
 ers thereof shall be paid the full value of their shares, less all 
 fines and a proportionate part of any unadjusted loss : Provided, 
 also, that shares pledged for share loans shall be treated as un- 
 pledged shares. 
 
 Shares may be issued in the name of a minor, and if so issued 
 may, at the discretion of the directors, be withdrawn, in manner 
 as provided in section two of this act, by such minor, the parent 
 or guardian of such minor, and in either case the payments 
 made on such withdrawals of shares shall be valid. When a 
 share or shares are held by any one in trust for another, the 
 name and residence of the person for whom such share or shares 
 are held shall be disclosed, and the account shall be kept in the 
 name of such holder as trustee for such person ; and, if no other 
 notice of the existence and terms of such trust has been given 
 in writing to the corporation, in the event of the death of the 
 trustee such shares may be withdrawn by the person for whom 
 such deposit was made or by his legal representatives. 
 
 SEC. 9. When each unpledged share of a given series reaches 
 the value of two hundred dollars all payments of dues thereon 
 shall cease, and the holder thereof shall be paid out of the funds 
 of the corporation two hundred dollars thereof with interest at 
 the rate of six per cent a year from the time of such maturity 
 to the time of such payment : Provided, that at no time shall 
 
240 CO-OPERATIVE SWINGS AND LOAN ASSOCIATIONS. 
 
 more than one half of the funds in the treasury be applicable 
 to the payment of such matured shares without the consent 
 of the directors: Provided, further, that when any series of 
 shares, either pledged or unpledged, reaches maturity between 
 the dates of adjustment of profits or whenever shares are retired 
 between such dates, the holders of such shares shall, in addition 
 to the value thereof, be entitled to interest at the rate of six per 
 cent per annum for all full months from the date of the preced- 
 ing adjustment. 
 
 Chapter one hundred and seventeen of the Public Statutes is 
 amended as follows by adding to section nine the following 
 words : " And that before paying matured shares all arrears and 
 fines shall be deducted." 
 
 SEC. 10. The moneys accumulated, after due allowance made 
 for all necessary and proper expenses and for the withdrawal of 
 shares, shall at each stated monthly meeting be offered to the 
 members according to the premiums bid by them for priority of 
 right to a loan. Every member whose bid is accepted shall be 
 entitled, upon giving proper security, to receive a loan of two 
 hundred dollars for each share held by him or such fractional 
 part of two hundred dollars as the by-laws may allow. If a 
 balance of money remains -unsold after a monthly sale, the 
 directors may invest the same in any of the securities named in 
 the second clause of section twenty of chapter one hundred 
 and sixteen. 
 
 SEC. 11. Premiums for loans shall consist of a percentage 
 charged on the amount lent in addition to interest, and shall be 
 deemed to be a consideration paid by the borrower for the pres- 
 ent use and possession of the future or ultimate value of his 
 shares, and shall, together with interest and fines, be received by 
 the corporation as a profit on the capital invested in the loan, 
 and shall be distributed to the various shares and series of said 
 capital as hereinafter provided. 
 
 SEC. 12. A borrowing member, for each share borrowed 
 upon, shall, in addition to his dues and monthly premium, pay 
 monthly interest on his loan at the rate of six per cent per 
 annum until his shares reach the ultimate value of two hun- 
 dred dollars each, or the loan has been repaid ; and when said 
 ultimate value is reached, said shares and loan shall be declared 
 
APPENDIX. 241 
 
 canceled and satisfied, and the balance, if any, due upon the 
 shares shall be paid to the member. 
 
 Any corporation organized under said chapter one hundred 
 and seventeen may provide in its by-laws that the bid for loans 
 at its stated monthly meeting shall, instead of a premium, be a 
 rate of annual interest upon the sum desired, payable in monthly 
 installments. Such bids shall include the whole interest to be 
 paid, and may be at any rate not less than five per centum per 
 annum. 
 
 SEC. 13. For every loan made, a note secured by first mort- 
 gage of real estate shall be given, accompanied by a transfer 
 and pledge of the shares of the borrower. The shares so pledged 
 shall be held by the corporation as collateral security for the 
 performance of the conditions of said note and mortgage. Said 
 note and mortgage shall recite the number of shares pledged 
 and the amount of money advanced thereon, and shall be con- 
 ditioned for the payment, at the stated meetings of the cor- 
 poration, of the monthly dues on said shares, and the interest 
 and premium on the loan, together with all fines on payments 
 in arrears until said shares reach the ultimate value of two 
 hundred dollars each, or said loan is otherwise canceled and 
 discharged : Provided, that the shares, without other security, 
 may, in the discretion of the directors, be pledged as security 
 for loans, to an amount not exceeding their value as adjusted 
 at the last adjustment and valuation of shares before the time 
 of the loan. 
 
 If the borrower neglects to offer security satisfactory to the 
 directors within the time prescribed by the by-laws, his right to 
 the loan shall be forfeited, and he shall be charged with one 
 month's interest and one month's premium at the rate bid by 
 him, together with all expenses, if any, incurred ; and the money 
 appropriated for such loan may be reloaned at the next or any 
 subsequent meeting. 
 
 SEC. 14. A borrower may repay a loan at any time, upon 
 application to the corporation, whereupon, on settlement of his 
 account, he shall be charged with the full amount of the orig- 
 inal loan, together with all monthly installments of interest, 
 premium and fines in arrears, and shall be given credit for the 
 withdrawing value of his shares pledged and transferred as 
 
242 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 security ; and the balance shall be received by the corporation 
 in full satisfaction and discharge of said loan : Provided, that 
 all settlements made at periods intervening between stated meet- 
 ings of the directors shall be made as of the date of the stated 
 meeting next succeeding such settlement ; and, Provided, that 
 a borrower desiring to retain his shares and membership may 
 at his option repay his loan without claiming credit for said 
 shares, whereupon said shares shall be retransferred to him, 
 and shall be free from any claim by reason of said canceled 
 loan. Partial payment of loans on real estate made by any 
 co-operative bank may be received in sums of fifty dollars or 
 any multiple thereof ; and for each two hundred dollars so re- 
 paid one share of stock shall be released from pledge. 
 
 SEC. 15. Members who make default in the payment of their 
 monthly dues, interest, and premiums, shall be charged a fine 
 not exceeding two per cent, a month on each dollar in arrears. 
 No fines shall be charged after the expiration of six months 
 from the first lapse in any such payment, nor upon a fine in 
 arrears. The shares of a member who continues in arrears 
 more than six months shall, at the option of the directors, if 
 the member fails to pay the arrears within thirty days after 
 notice, be declared forfeited, and the withdrawing value of the 
 shares at the time of the first default shall be ascertained, and, 
 after deducting all fines and other legal charges, the balance 
 remaining shall be transferred to an account to be designated 
 the " Forfeited Share Account," to the credit of the defaulting 
 member. Said member, if not a borrower, shall be entitled, 
 upon thirty days' notice, to receive the balance so transferred 
 without interest from the time of the transfer, in the order of 
 his turn, out of the funds appropriated to the payment of with- 
 drawals. All shares so forfeited or transferred shall cease to 
 participate in any profits of the corporation accruing after the 
 last adjustment and valuation of said shares before said first 
 default. 
 
 SEC. 16. If a borrowing member is in arrears for dues, inter- 
 est, premium or fines, for more than six months, the directors 
 may, at their discretion, declare the shares forfeited, after one 
 month's notice, if the arrears continue unpaid. The account of 
 such borrowing member shall then be debited with the arrears 
 
APPENDIX. 243 
 
 of interest " premium," and fines of date of forfeiture, and the 
 shares shall be credited upon the loan at their withdrawing 
 value. The balance of the account may, and after six months 
 shall, be enforced against the security, and be recovered as se- 
 cured debts are recovered at law. 
 
 SEC. 17. The general accounts of every such corporation 
 shall be kept by double entry. All moneys received by the cor- 
 poration from each member shall be receipted for by persons 
 designated by the directors, in a pass-book provided for by the 
 corporation for the use of, and to be held by, the member ; and 
 said pass-book shall be plainly marked with the name and resi- 
 dence of the holder thereof, the number of shares held by him, 
 and the number or designation of the series or issue to which 
 said shares respectively belong, and the date of the issue of 
 such series. All moneys so received shall be originally entered 
 by the proper officer in a book to be called the " cash-book," to 
 be provided by the corporation for the purpose, and the entries 
 therein shall be so made as to show the name of the payer, the 
 number of shares, the number or designation of the series or 
 issue of the particular share or shares so entered, together with 
 the amount of dues, interest, premiums, and fines paid thereon, 
 as the case may be. Each payment shall be classified and en- 
 tered into a column devoted to its kind. Said cash-book shall 
 be closed after the termination of each stated meeting, and 
 shall be an exhibit of the receipts of all moneys paid at said 
 meeting. All payments made by the corporation for any pur- 
 pose whatsoever shall be by order, check, or draft upon the 
 treasurer, signed by the president and secretary, and indorsed 
 by the persons in whose favor the same are drawn. The name 
 of the payee, the amount paid, and the purpose, object, or thing 
 for which the payment is made, together with its date, shall be 
 entered on the margin of said order, check, or draft. The treas- 
 urer shall dispose of and secure the safe keeping of all moneys, 
 securities, and property of the corporation, in the manner des- 
 ignated by the by-laws, and the treasurer and secretary shall 
 give such security for the faithful performance of their respect- 
 ive duties as the by-laws may direct. 
 
 SEC. 18. The profits and losses may be distributed annually, 
 semi-annualy, or quarterly, to the shares then existing, but shall 
 
244 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 be distributed at least once in each year, and whenever a new 
 series of shares is to be issued. Profits and losses shall be dis- 
 tributed to the various shares existing at the time of such dis- 
 tribution, in proportion to their value at that time, and shall be 
 computed upon the basis of a single share fully paid to the date 
 of distribution. Losses shall be apportioned immediately after 
 their occurrence. 
 
 At each periodical distribution of profits the directors shall 
 reserve as a guarantee fund a sum not less than one nor more 
 than five per cent of the net profits accruing since the next pre- 
 ceding adjustment, until such fund amounts to five per cent of 
 the dues capital, which fund shall thereafter be maintained and 
 held ; and said fund shall be at all times available to meet losses 
 in the business of the corporation from depreciation of its 
 securities or otherwise. 
 
 SEC. 19. Any such corporation may purchase at any sale, 
 public or private, any real estate upon which it may have a 
 mortgage, judgment, lien, or other incumbrance, or in which it 
 may have an interest ; and may sell, lease, convey, or mortgage, 
 at pleasure, the real estate so purchased to any person or persons 
 whatsoever. All real estate so acquired shall be sold within five 
 years from the acquisition of the title thereto. 
 
 SEC. 20. The commissioners of savings-banks shall perform 
 in reference to every such corporation, the same duties, and shall 
 have the same powers, as are required of or given to them in 
 reference to savings-banks, and shall annually make a report to 
 the General Court of such facts and statements respecting such 
 associations, and in such forms as they deem that the public 
 interest requires. Every officer of such corporation shall answer 
 truly all inquiries made, and shall make all returns required by 
 the commissioners. 
 
 OHIO. 
 
 LAWS OF OHIO RELATING TO BUILDING ASSOCIATIONS. 
 
 SECTION 3833. A corporation organized for the purpose of 
 raising money to be loaned among its members for use in buying 
 lots or in building and repairing, or other purposes, may levy, 
 
APPENDIX. 245 
 
 assess, and collect from its members such sums of money, by 
 rates of stated dues, fines, interest and premiums on loans, or 
 may otherwise raise money as the corporation by its constitution 
 and by-laws shall provide ; and it may acquire, hold, incumber 
 and convey all such real estate and personal property as may be 
 legitimately pledged to it on such loans, or may otherwise be 
 transferred to it in the due course of its business ; but the dues, 
 fines and premiums so paid by its members, although in addition 
 to the legal rate of interest on loans taken by it, shall not be 
 construed to make the loans so taken usurious ; and no person 
 shall hold more than twenty shares in any such corporation in 
 his own right. 
 
 SEC. 3834. Such corporation may receive on deposit all sums 
 of money offered for that purpose, on such terms, and at such 
 rates of interest, not exceeding the legal rate, as may be pre- 
 scribed by the board of directors, and loan the same pursuant to 
 the preceding section. 
 
 SEC. 3835a. So much of the earnings as may be necessary 
 shall be set apart to defray the current expenses of the corpora- 
 tion, and a portion of the earnings, to be determined by the 
 board of directors, shall be reserved annually or semi-annually 
 for the payment of contingent losses, and the residue of such 
 earnings or dividends shall be transferred to the credit of all 
 members, to be paid to them at such times, and in such manner, 
 and in such proportions as the corporation by its constitution 
 and by-laws in conformity with this act may provide ; and upon 
 the cancellation of any share or shares that have been fully paid, 
 the corporation shall pay to such member or members their pro 
 rata share of so much of the reserve fund as has been accumu- 
 lated during the membership and remains therein at the time of 
 the termination of the membership of such member or mem- 
 bers. 
 
 SEC. 3835b. Such corporation shall be authorized to provide 
 in its constitution and by-laws, rules and regulations, for the 
 terms of membership ; for the annual subscribing shares of 
 stock therein; for an annual or semi-annual division of the 
 earnings of the dividends or earnings among the members ; for 
 a rebate of interest at the end of each year on the amount of 
 dues paid on loans ; for the sale of money ; for the time and 
 
24:6 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 amount of the payment of dues, interest, premiums, fines, and 
 other assessments; for the withdrawal of non-borrowing members, 
 and also for the withdrawal of non-borrowing members of part 
 payments on their shares of stock ; for the cancellation of the 
 securities of borrowing members upon demand being made by 
 them or their legal representatives. 
 
 SEC. 3835c. All adjustments of loans between such corpora- 
 tion and its borrowing members shall be upon the following 
 terms, to wit : After the premium for one year has been paid, 
 and also the interest and premium on such loans up to the day 
 of settlement, the borrowing member shall pay to the corpora- 
 tion an amount which, added to the dues and dividends cred- 
 ited, will equal the sum actually borrowed ; and also such fines 
 and other assessments as are provided for by the constitution 
 and by-laws of such corporation. 
 
 SEC. 3835d. The stock or shares of individual members or 
 depositors of such corporation shall be considered and held as 
 credits, and the said members and depositors, individually, shall 
 list for taxation the number of shares held by them, and the 
 true value thereof in money, on the day preceding the second 
 Monday in April in each year, and the same shall be assessed at 
 such valuation and taxes as other property. 
 
 SEC. 3835e. Any building association, after at least three 
 fourths of its capital stock is fully subscribed and taken, may 
 increase its capital stock by a vote of its board of directors, a 
 majority of the members of such board of directors voting in 
 favor thereof ; and a certificate of such action of the board of 
 directors shall be filed with the Secretary of State. 
 
 SEC. 3836. All shares of stock held in such corporations by 
 or in the name of a minor, shall, upon application therefor, be 
 paid to such minor or persons who hold such shares of stock for 
 the minor, and the same shall be valid payment. 
 
 Passed May 8, 1886. 
 
 (Ohio Laws V, pp. 116, 117.) 
 
APPENDIX. 247 
 
 FOKMS. 
 
 No. 1. 
 
 We submit the following as a form for suitable by-laws for 
 an association incorporated under the New York act of 1887. 
 They are, in fact, the by-laws of the Elmira Co-operative Sav- 
 ings and Loan Association, organized in 1888, and were drawn 
 by us with much care ; and supplement the act of 1887 in those 
 matters left to the discretion of the association by the act, ac- 
 cording to our conception of the true co-operative savings and 
 loan association. They can be readily modified to meet the 
 wishes of those who may differ with us on minor details. 
 
 The certificate of incorporation (see form in Chapter VII) 
 fixes the name and place of doing business, hence they are not 
 given in the by-laws. 
 
 BY-LAWS OP THE CO-OPERATIVE SAVINGS AND 
 
 LOAN ASSOCIATION. 
 
 Officers. 
 
 SECTION 1. The officers of this association shall be a Presi- 
 dent, Vice-President, Treasurer, Secretary, a Board of Directors, 
 and an Attorney. 
 
 SEC. 2. The Board of Directors shall consist of thirteen mem- 
 bers of whom nine shall be elected, and the President, Vice- 
 President, Treasurer and Secretary shall be ex-officio members. 
 
 SEC. 3. The Attorney shall be appointed and removed at 
 pleasure by the Board of Directors; all other officers shall be 
 elected annually by ballot by the stockholders. In case of va- 
 cancies, the Board of Directors may fill the same until the next 
 annual election. 
 
 SEC. 4. The President shall preside at all meetings of the 
 stockholders and of the Board of Directors ; sign all certificates 
 of stock, and all orders upon the Treasurer for the payment or 
 appropriation of moneys, and perform all other duties usually 
 appertaining to such office. 
 
24:8 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 SEC. 5. The Vice-President, in the absence or disability of 
 the President, shall perform the duties of President. 
 
 SEC. 6. The Treasurer shall be the custodian of all funds, 
 securities, contracts and deeds belonging to the association, sub- 
 ject however to the direction of the Board of Directors. He 
 shall receipt for all moneys paid to him, and pay all orders or 
 drafts upon him, ordered by the Board of Directors and signed 
 by the President and attested by the Secretary. He shall keep 
 suitable and accurate books of account of all his transactions, 
 and make a report of the finances of the association at each 
 stated meeting of the Board of Directors, which report shall be 
 filed by the Secretary and entered in the minutes of the meet- 
 ing. His books of accounts shall be subject to the call and in- 
 spection of the Board of Directors at any time and shall be sub- 
 ject to the inspection of any stockholder at all reasonable hours. 
 He shall give a bond with at least two sureties, one or more of 
 whom shall not be connected with the bank where he deposits 
 the funds of the association, in an amount prescribed by the 
 Board of Directors, and in form, and with sureties and the suffi- 
 ciency thereof, subject to their approval. At the expiration of 
 his term of office, he shall deliver to his successor in office, 
 within five days after the qualification of such successor, all 
 moneys, books and papers of the association in his possession. 
 
 SEC. 7. The Secretary shall be present at all meetings of the 
 stockholders and Board of Directors in person, or shall have a 
 proxy from the Board of Directors, and keep correct minutes of 
 the proceedings, which shall be transcribed into a suitable min- 
 ute-book and read at the next meeting for the approval of the 
 Board. He shall also keep a stock ledger wherein shall appear 
 a minute of every certificate of stock issued and all transfers 
 until surrendered ; also an order-book, showing date, the amount, 
 what given for, and the payee of all orders attested by him ; 
 also a security-book, wherein shall appear a minute of all secur- 
 ities taken by the association ; also a dues, interest and fine 
 book, wherein shall appear the amount due from and paid by 
 each shareholder at each meeting for the receipt, of dues. He 
 shall make a monthly report of the number of shares outstand- 
 ing, and such other facts as the Board of Directors may require. 
 He shall make a detailed report of the business of the associa- 
 
APPENDIX. 249 
 
 tion at each annual meeting, and at all meetings when required 
 by the Board of Directors or President. His books shall be 
 open for inspection by any stockholder at all reasonable hours. 
 He shall have charge of the publications and the correspondence 
 of the association, and shall deliver to his successor in office, 
 within five days after the qualification of such successor, all 
 books and papers in his possession belonging to the association. 
 
 SEC. 8. A Finance Committee of three members shall be 
 appointed by the President from the nine elected members of 
 the Board, who shall serve for four months ; a second and a 
 third committee shall be appointed in the same manner during 
 the year ; such committees shall be so arranged -that each of 
 said nine directors shall serve upon a committee for four months 
 during the year. The President and Vice-President shall at all 
 times be members ex officio of this committee. 
 
 SEC. 9. The Attorney shall examine the abstracts of title, 
 procured from the County Clerk, to all real estate which has 
 been offered to the association as security for loans and approved 
 by the Finance Committee, and, if found satisfactory, he shall 
 indorse his approval thereon. He shall prepare all securities 
 given to the association and cause all mortgages to be recorded 
 as soon as delivered. His charges for such services shall be rea- 
 sonable and paid by the borrower, unless the Board otherwise 
 direct. He shall meet with the Board of Directors when re- 
 quested, but shall have no vote. 
 
 SEC. 10. No officer, other than the Treasurer, Secretary, and 
 Attorney, shall receive compensation for any services rendered 
 by him. The salaries of the Treasurer and Secretary shall be 
 fixed by the Board of Directors. The Attorney shall not be 
 entitled to compensation for his attendance upon the ordinary 
 stated meetings of the Board of Directors, stockholders, or 
 Finance Committee. All officers and committees shall be en- 
 titled to all expenses necessarily incurred by them in the proper 
 discharge of their duties. 
 
 SEC. 11. The Board of Directors, by a two-thirds vote, shall 
 have power to suspend any officer of the association, for cause, 
 which shall be stated in writing and served upon him at the 
 time of such suspension ; whereupon a special meeting of the 
 stockholders shall be called to consider such suspension, and at 
 17 
 
250 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 such special meeting, or a meeting adjourned therefrom, the 
 offending officer shall be reinstated or removed by a majority 
 vote of the stock represented at such meeting. 
 
 Meetings. 
 
 SEC. 12. The annual meetings of the shareholders of the 
 association shall be held on the first Monday evening in the 
 month of February in each year for the election of officers and 
 the transaction of the b'usiness of the association. 
 
 SEC. 13. Special meetings of the shareholders shall be con- 
 vened by the President, at the written request of ten sharehold- 
 ers. A notice of such meeting, stating the time, place, and busi- 
 ness to be brought before the meeting, shall be mailed by the 
 Secretary, postage prepaid, to each shareholder, at his post- 
 office address as it appears upon the books of the association, at 
 least five days before the date of such meeting. In event such 
 special meeting is desired to consider the suspension of the 
 President, such special meeting shall be called by the Secretary. 
 
 SEC. 14. The stated monthly meeting of the Board of Direct- 
 ors shall be held on the second Monday evening in each month. 
 The Finance Committee of the Board shall meet the same even- 
 ing, from seven to nine o'clock, to receive dues and any other 
 moneys due or payable to the association. The whole Board 
 shall convene immediately following the receipt of dues, etc., 
 and bidding for loans. 
 
 SEC. 15. Special meetings of the Board of Directors may be 
 called at any time by the President, and shall be called by him 
 on the written request of three directors. At least twenty-four 
 hours' notice of a special meeting of the Board shall be given 
 orally by the Secretary, or by leaving a written notice of such 
 meeting at the business place or the residence of each director. 
 
 SEC. 16. Five members of the Board shall constitute a quorum 
 for the transaction of all business, except the suspension of an 
 officer, the loaning of money to another association, and the 
 borrowing of money by the association. 
 
 SEC. 17. The Finance Committee shall meet at seven and 
 one-half o'clock on each Friday evening following the monthly 
 meeting of the Board of Directors, for the purpose of passing 
 upon the sufficiency of the securities offered for the loans bid 
 
APPENDIX. 251 
 
 off at such monthly meeting. The Secretary and Attorney shall 
 meet with the Committee, but shall have no vote. 
 
 Stock, Entrance Fee, and Transfer Fee. 
 
 SEC. 18. The stock of the association shall be issued in yearly 
 series, and each shareholder shall be entitled to a certificate of 
 the shares of stock held by him or her, issued in the name and 
 under the seal of the association, and signed by the President 
 and Secretary. The series, beginning with the first issued, shall 
 be numbered in regular order one, two, three, and so on and 
 the certificate shall plainly state the number of the series in 
 which the shares are issued. An entrance fee of twenty-five 
 cents shall be charged for each share of stock issued. A certifi- 
 cate of unpledged shares of stock may be transferred by assign- 
 ment, in person or by attorney, in the presence of the President 
 or Secretary, and the assignment shall be minuted upon the 
 stock-book of the association and indorsed upon the certificate, 
 and the assignee, by signing the by-laws and paying a transfer 
 fee of ten cents a share, shall become a member of the asso- 
 ciation. 
 
 SEC. 19. A certificate of stock upon which a loan has been 
 made, may be transferred in the same manner as in the last sec- 
 tion described, subject to the rights of the association in the 
 following case : First, where the assignee, in case of a real-estate 
 loan, has purchased the mortgaged property and assumed the 
 payment of the mortgage ; second, where the loan is secured by 
 the stock transferred and the assignee assumes the payment of 
 the loan and makes his bond to the association for such payment. 
 
 Payment of Dues, etc. 
 
 SEC. 20. At the request of the Finance Committee, the Secre- 
 tary and Treasurer shall aid them in the receipt of dues, etc. 
 One member of the Committee at the time the dues and other 
 payments are made shall receipt for the same in a pass-book, 
 which shall be given to the shareholder with his certificate of 
 stock ; while another member of the Committee shall check off 
 the amount paid from the dues, interest and fine book which 
 the Secretary shall have at such meeting. At the close of the 
 meeting for the receipt of dues, etc., the Committee shall turn 
 
252 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 over the funds received to the Treasurer and take his receipt 
 therefor. 
 
 SEC. 21. The Finance Committee or any other officer shall 
 not receive dues or other payments due the association at any 
 other time than at the stated meetings, except the Treasurer 
 may receive payments of loans under the provisions of section 
 ten of the act under which this association is formed and incor- 
 porated. 
 
 SEC. 22. Whenever a shareholder shall be in arrears for dues, 
 interest and fines, and a payment shall be made insufficient to 
 square them all, the payment shall first be applied to the pay- 
 ment of the fines, and second to dues and interest in equal 
 parts. 
 
 Fines. 
 
 SEC. 23. For every dollar of dues, interest and fines which a 
 shareholder neglects or refuses to pay, he shall pay a fine of ten 
 cents for each month in arrears. In the case of the death of the 
 shareholder his estate shall not be chargeable with fines for non- 
 payment of dues at the stated monthly meeting of the Board 
 immediately following such death, nor shall any fines be im- 
 posed in such case at any subsequent meeting for the receiving 
 of dues unless the personal representatives of such deceased 
 shareholder or their assigns shall elect to carry the shares of 
 stock of the deceased shareholder ; but such shares shall be with- 
 drawn and their withdrawal value computed, as prescribed in 
 section twenty-six hereof, to the date of such death, shall be due 
 and payable to his personal representatives at the first stated 
 monthly meeting of the Board following the service of a written 
 demand therefor upon the Secretary or as soon thereafter as the 
 association shall have funds applicable to the payment of with- 
 drawing stock. 
 
 SEC. 24. The successful bidder for a loan at the stated meet- 
 ings shall immediately furnish to the Board a written descrip- 
 tion of the security which he proposes for his loan. The same 
 shall pass without a motion to the Finance Committee unless 
 the Board of Directors shall by a unanimous vote decide to pass 
 upon the sufficiency of the security offered forthwith. The 
 Board may also direct that the Finance Committee report to 
 the Board for their determination upon the sufficiency of the 
 
APPENDIX. 253 
 
 security. In all other cases the Finance Committee shall per- 
 sonally examine the real estate offered as security and appraise 
 the value thereof before the time fixed for their meeting to pass 
 upon its sufficiency as a security ; and if at their meeting they 
 approve of the security as to its value and the Attorney shall ap- 
 prove of the title, the loan shall be made without further action 
 by the Board of Directors ; and when the mortgage has been 
 placed in the Clerk's office for record, the President shall sign 
 and the Secretary shall attest and deliver an order upon the 
 Treasurer for the amount going to the borrower upon his loan. 
 All the securities for the loan shall thereupon be delivered to 
 the Secretary, who shall enter the same at once in the security- 
 book, and the Secretary shall thereupon deliver the same with 
 all assignments and abstracts of title and insurance papers to 
 the Treasurer. 
 
 SEC. 25. Action upon security offered for loans shall not be 
 had by the Finance Committee or by the Board of Directors in 
 the presence of the borrower. If a borrower shall fail to offer 
 satisfactory security for his proposed loan before the next stated 
 meeting, his right to a loan upon his bid shall be forfeited un- 
 less the Board otherwise direct. 
 
 Dividends. 
 
 SEC. 26. The Board of Directors, at a meeting held subse- 
 quent to the last stated monthly meeting in the fiscal year and 
 before the annual meeting, shall declare a dividend distributing 
 the profits since the last dividend, under the provisions of section 
 fifteen of the said act under which the association is incorpo- 
 rated. They shall also at said meeting, or a meeting adjourned 
 therefrom and held before the annual meeting, determine the 
 withdrawal value of the shares of stock until the next distribu- 
 tion of profits. In determining such withdrawal value they 
 shall allow to all shares over two years of age at least seventy- 
 five per cent of the profits which have accrued and have been 
 added to the value of the shares and as much more as to them 
 shall seem wise. They shall have discretionary power to make 
 the percentage of profits withdrawn uniform upon all such 
 shares or increase the same as the shares increase in age. In 
 the case of shares not over two years of age at the time of de- 
 
254 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 termining the withdrawal value, they shall allow, in lieu of a 
 percentage of profits, interest upon the dues paid in at a rate of 
 not less than four and a half per cent per annum. Such with- 
 drawal value shall be reported at the annual meeting, and take 
 effect on the date of the first monthly meeting thereafter ; and 
 upon all withdrawals made until the next annual meeting, in 
 addition to such withdrawal value, interest shall be paid upon 
 the withdrawal value of the shares and upon all dues paid sub- 
 sequent to said annual meeting, together with such dues, at the 
 rate of four per cent per annum. 
 
 SEC. 27. The President at the last monthly meeting in the 
 fiscal year shall appoint an auditing committee of three share- 
 holders, who are not officers, to examine the accounts of the 
 Treasurer and Secretary and report thereon to the annual meet- 
 ing. He shall also appoint a committee of three stockholders, 
 not officers, to make an examination of their accounts at any 
 time during the year when so required in writing by ten share- 
 holders ; and he may appoint such committee at any time upon 
 his own motion. 
 
 SEC. 28. No officer shall have power to make an expenditure 
 or incur any liability on behalf of the association without au- 
 thority given therefor by the Board of Directors. 
 
 SEC. 29. Every order drawn upon the Treasurer shall be 
 dated when made and state the payee and the purpose for which 
 it is drawn, and a stub from which the order shall be detached 
 shall contain a statement of the same facts. 
 
 SEC. 30. These by-laws may be altered or amended at any 
 annual or special meeting of the shareholders by a two-thirds 
 vote of the shareholders present. 
 
 No. 2. 
 
 The following is a copy of the by-laws of the Guardian Co- 
 operative Bank of Boston, Massachusetts. D. Eldridge, Esq., 
 its Secretary and Treasurer, and one of the most conspicuous 
 men in Massachusetts at this time, in extending this form of co- 
 operation and insisting upon correct methods in the transaction 
 of their business, recommends these by-laws as proper in form 
 and matter under the Massachusetts law : 
 
APPENDIX. 255 
 
 ARTICLE I. 
 
 NAME AND OBJECT. 
 
 This corporation shall be known by the name of " The Guard- 
 ian Co-operative Bank," and its object shall be the accumulation 
 of a capital in money, to be derived from savings and accumu- 
 lations of the members thereof, to be paid into said corporation 
 in fixed periodical installments, and the lending of such funds 
 so accumulated to its members, in accordance with the provis- 
 ions of chapter one hundred and seventeen of the Public Stat- 
 utes of the year eighteen hundred and eighty-one of the Legis- 
 lature of Massachusetts. 
 
 AETICLE II. 
 
 CAPITAL STOCK. 
 
 The capital stock of the corporation (to be accumulated) 
 shall be one million dollars, and shall be divided into shares of 
 the ultimate value of two hundred dollars each, which shall be 
 issued in quarterly, half-yearly, or yearly series, as the members 
 may determine. 
 
 ARTICLE m. 
 
 LOCATION. 
 
 This corporation shall be located in the city of Boston, Massa- 
 chusetts, and the office or place of business or meeting shall be 
 determined by the Board of Directors. 
 
 ARTICLE IV. 
 
 OFFICERS AND THEIE DUTIES. 
 
 SECTION 1. The officers of this corporation shall consist of a 
 President, a Vice-President, a Secretary, who shall be Clerk of 
 the Corporation, a Treasurer, and fifteen Directors, all of whom 
 shall constitute a Board of Directors, and each of whom must be 
 a shareholder. The offices of Secretary and Treasurer may be 
 held by one and the same person. After the first election they 
 shall be elected by the shareholders at the annual meeting, and 
 shall continue in office and perform their respective duties until 
 their successors are duly elected. In case of vacancy in the 
 office of President, Vice-President, Secretary, or Treasurer by 
 death, resignation or otherwise, the remaining members of the 
 Board of Directors shall make such temporary appointment as 
 
256 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 may be absolutely necessary to carry on the business of the cor- 
 poration, and immediately call a special meeting of the share- 
 holders for the purpose of electing such new officer or officers 
 as may be necessary to fill the aforesaid vacancy or vacancies 
 for the unexpired term. All other vacancies may be filled by 
 the remaining members of the Board. 
 
 SEC. 2. The Board of Directors shall have the general manage- 
 ment of the business of the corporation. They shall make an an- 
 nual report at the annual meeting of the affairs of the corporation. 
 
 SEC. 3. The President shall preside at all regular and special 
 meetings of the corporation and of the Board of Directors. The 
 Vice-President shall, in the absence of the President, perform 
 all his duties. In the absence of the President and Vice-Presi- 
 dent, the Board of Directors may elect a presiding officer pro 
 tempore. The President shall, immediately after the annual 
 meeting, nominate from the Board of Directors, subject to con- 
 firmation separately by the Board, for a term of one year, two 
 competent persons who shall constitute a Finance Committee, 
 and the first named of whom shall be chairman. The duties of 
 the Finance Committee shall be to examine the general expense 
 bills of the corporation, and, if necessary, to assist the Secretary 
 in receiving *the money paid at the regular monthly meetings, 
 with such other duties as the President may designate. The 
 President shall also, immediately after the annual meeting, 
 nominate from the Board of Directors, subject to confirmation 
 separately by the Board, for a term of one year, five com- 
 petent persons who shall constitute a Security Committee, and 
 the first named of whom shall be chairman. The duties of the 
 Security Committee shall be to examine the real estate offered 
 as security for loans, and to report in writing as to its value, 
 and whether, in their opinion, the corporation can safely loan 
 the amount applied for. The actual expenses of the Security 
 Committee shall be borne by the corporation, provided that, in 
 case of more than ordinary expenses, the borrower shall pay a 
 portion thereof, if the Board of Directors grant the loan condi- 
 tioned upon such partial payment of expenses. The personal 
 examination by the Security Committee, of any parcel of real 
 estate offered as security for loans, may be omitted by special 
 vote of the Board of Directors. 
 
APPENDIX. 257 
 
 No member of the Security Committee shall make official 
 report upon any property, offered as security for a loan, in 
 which he has a personal interest. 
 
 SEC. 4. The Secretary shall keep correct records of the meet- 
 ings of the corporation and of the Board of Directors. He shall 
 receive all moneys due the corporation, and pay the same 
 promptly to the Treasurer. 
 
 He shall be the corporation's book-keeper, and have charge 
 of all books and papers necessary to the performance of his 
 duties, and shall turn over to his successor in office all such 
 books and papers within two weeks after the election of such 
 successor. He shall notify the directors of all special meetings 
 of the Board, and all shareholders of the regular and special 
 meetings of the corporation. Notice of all regular and of every 
 special meeting of the corporation shall be published by the 
 Secretary not less than three times, one being a Saturday, in 
 one or more daily newspapers published in Boston, the first 
 publication thereof to be not less than one week previous to 
 such meeting Such notice shall state the day, hour, place, and 
 business of such meeting. He shall prepare the annual report 
 for the Directors. 
 
 He shall perform such other duties as the Board of Directors 
 may determine. He shall receive such compensation for his 
 services as the Board of Directors may determine, and shall be 
 paid the same in monthly installments. He shall furnish se- 
 curity satisfactory to the Board of Directors, for the faithful 
 performance of his duties. In the absence of the Secretary 
 from a monthly meeting, the President shall appoint a Secre- 
 tary pro tempore. 
 
 SEC. 5. The Treasurer shall receive from the Secretary all 
 moneys paid to the corporation, and give his receipt therefor. 
 He shall pay all drafts of the Secretary, when signed by the 
 proper officers. He shall be the custodian of all deeds, mort- 
 gages, mortgage-notes, policies of insurance, or other securities 
 of the corporation, except his own bond, which shall be in the 
 custody of the President. He shall keep a correct account of 
 all moneys received and paid, and shall make a written report of 
 the same at each monthly meeting of the Directors. His books 
 shall at all times be open to the inspection of the Directors. 
 
258 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 He shall furnish security, satisfactory to the Board of Di- 
 rectors, for the faithful performance of his duties. He shall 
 receive such compensation for his services as the Board of Di- 
 rectors may determine. 
 
 Upon the expiration of his term of office, or in the event of 
 his death, or his resignation, or removal from office, he, or his 
 legal representatives, shall deliver to his successor all books, 
 moneys, papers, and other property of the corporation. 
 
 SEC. 6. The Board of Directors snail appoint an attorney, who 
 shall examine all titles to property offered as security for loans, 
 and shall prepare all papers of a legal nature required by the 
 corporation. In case of loans, the member offering security 
 therefor shall pay the attorney's fees, whether the security is 
 accepted or rejected, subject to decision by the Board of Di- 
 rectors in case of dispute as to the amount of the attorney's 
 
 charges. 
 
 AET1CLE V. 
 
 REGULAR MEETINGS. 
 
 The annual meeting of the shareholders shall be held on the 
 first Friday in June, in each and every year, at half -past seven 
 o'clock, p. M. Monthly meetings of the Board of Directors shall 
 be held on the first Friday in each and every month, at half- 
 past seven o'clock, p. M., for the purpose of transacting any busi- 
 ness that may be necessary. If either of said Fridays shall be a 
 legal holiday, or observed as such, the meeting may be held on 
 such other evening of the same week as the Board of Directors 
 may designate, provided that notice of the change shall be given 
 at the next preceding monthly meeting. 
 
 The shareholders shall meet on the first Friday in May, in 
 each and every year, at half-past seven o'clock, p. M., for the 
 purpose of making nominations for officers and Auditors for the 
 ensuing fiscal year. In case of failure on the part of the share- 
 holders to nominate a sufficient number to fill the various offices 
 (including Auditors), it shall then become the duty of the Board 
 of Directors to complete the list. The Secretary shall cause the 
 list of nominees to be printed for use as ballots at the annual 
 meeting, none being eligible except the nominees. 
 
 All elections shall be by ballot, and no member shall be en- 
 titled to vote at any election who has not been a member one 
 
APPENDIX. 259 
 
 month, nor shall the name of any person not a member be 
 placed upon the list of nominees. At all elections a check list 
 shall be used, and the polls shall be open from half-past seven 
 o'clock, P. M., to nine o'clock, p. M., and be in charge of two or 
 more members appointed by the presiding officer. No share- 
 holder shall vote by proxy. 
 
 ARTICLE VI. 
 
 SPECIAL MEETINGS. 
 
 A special meeting of the shareholders shall be called by the 
 Secretary upon the written petition of ten shareholders, ad- 
 dressed to the Board of Directors, setting forth the cause for 
 such special meeting, provided that none of said ten members 
 are in arrears on any account, and provided further, that each 
 of them shall have been a shareholder one month, and provided, 
 that at said special meeting, if called, no business shall be trans- 
 acted except that for which the meeting was called as set forth 
 in the petition. In the absence of the President and Vice-Presi- 
 dent from such special meeting, the shareholders present may 
 appoint a presiding officer pro tempore. 
 
 Special meetings of the shareholders may be called by the 
 President, or by the Board of Directors. 
 
 AETICLE VII. 
 
 QUORUM. 
 
 Twenty-five shareholders, or a majority of the actual number 
 of shareholders shall constitute a quorum in special or regular 
 meetings of the corporation. 
 
 Nine members or a majority of those actually in office, shall 
 constitute a quorum of the Board of Directors, provided, that 
 moneys may be received and loaned at the monthly meetings 
 without a quorum of the Directors. 
 
 ARTICLE VIII. 
 
 AUDITORS. 
 
 There shall be three Auditors elected annually at the annual 
 meeting, to serve one year. Their duties shall be to examine 
 and audit the books, accounts and vouchers of the Secretary and 
 Treasurer, and certify as to the correctness of the same at or 
 
260 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONa 
 
 before the annual meeting next following their election. They 
 shall have power to make partial or special reports at any regu- 
 lar monthly meeting. Vacancies occurring from any cause 
 shall be filled for the unexpired term by the Board of Directors, 
 No person shall serve as an Auditor and Director at the same 
 time. The Directors shall appoint Auditors to serve until the 
 first annual meeting. 
 
 ARTICLE IX. 
 
 SEAL. 
 
 The corporate seal shall consist of the name and location of 
 the corporation, and the date of its charter, the whole to be 
 surrounded by an ornamental circular border. It shall be pro- 
 duced by a single impression of an embossing press. It shall 
 be in the custody of the Treasurer, and he shall see that it is 
 affixed to all official papers that require it. 
 
 ARTICLE X. 
 
 FINES. 
 
 In default of the monthly payment of dues, interest or 
 premiums, the shareholder shall be subject to a fine of two cents 
 per month upon each and every dollar, or fractional part thereof 
 not less than fifty cents, in arrears. 
 
 ARTICLE XI. 
 
 TRANSFER FEES. 
 
 One or more shares held in the name of one person in any 
 one series of stock, may be transferred to another person upon 
 payment of a fee of twenty-five cents for each transfer. 
 
 ARTICLE XII. 
 
 LC&NS ON REAL ESTATE. 
 
 Each and every shareholder is entitled to a loan of two 
 hundred dollars upon each share held by him unpledged, and 
 not in arrears on any account. All money subject to loan shall 
 be offered at competitive sale by the President or some person 
 designated by him, at each regular monthly meeting of the 
 Directors. All loans shall be in sums of fifty dollars or its mul- 
 tiple and all interest and premiums shall be payable monthly in 
 advance. Any person shall forfeit his right to a loan if, after 
 
APPENDIX. 2G1 
 
 successfully bidding for the money, he shall fail to furnish sat- 
 isfactory security before the next succeeding monthly meeting, 
 provided that the right to said loan may be continued while the 
 interest and premium are actually paid in advance. 
 
 ARTICLE XIII. 
 
 SECURITY FOR REAL-ESTATE LOANS. 
 
 No single parcel of real estate shall be taken as security for 
 loans to two or more members. Two or more parcels of real 
 estate may be taken as security from one borrower. 
 
 All real estate taken as security for loans, must be located in 
 the State of Massachusetts. No borrower shall pledge more than 
 one series of shares for any one loan. 
 
 ARTICLE XIV. 
 
 LOANS ON SHARES. 
 
 Loans on shares are made under the following statutory pro- 
 vision : " The shares, without other security, may in the discre- 
 tion of the directors be pledged as security for loans, to an 
 amount not exceeding their value as adjusted at the last adjust- 
 ment and valuation of shares before the time of the loan." 
 
 ARTICLE XV. 
 
 BIDS FOR LOANS. 
 
 The bids for loans shall be in sums of five cents or its multi- 
 ple, per share per month. 
 
 No sum greater than $2,000 shall be taken upon one bid. 
 No more than one loan shall be claimed upon one bid. 
 
 ARTICLE XVI. 
 
 INSURANCE. 
 
 All buildings upon real estate taken as security for loans 
 shall be insured against fire for the benefit of the corporation at 
 the expense of the borrower. All policies shall be in the cus- 
 tody of the Treasurer, and he shall see that no policy is suffered 
 to lapse. 
 
 ARTICLE XVII. 
 
 WITHDRAWALS. 
 
 Shares may be withdrawn upon one month's notice, when the 
 shareholder's account shall be settled as follows: From the 
 
262 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 amount then standing to the credit of the shares to be with- 
 drawn, there shall be deducted all fines, a proportionate part of 
 any unadjusted loss, and one fourth of all the profits which 
 have been placed to the credit of said shares, and he shall be 
 paid the balance. A notice to withdraw shall become null and 
 void if not acted upon within two months. 
 
 ARTICLE XVIII. 
 
 RETIRING OF SHARES. 
 
 When in the discretion of the Board of Directors it is deemed 
 expedient to retire the unpledged shares of any series, (as pro- 
 vided by statute) notice of their intention to do so shall be sent 
 by mail to each holder of such shares one month prior to the 
 retirement, and such shareholders shall be notified by mail of 
 the result of the drawing. 
 
 ARTICLE XIX. 
 
 LOST OR STOLEN PASS-BOOKS. 
 
 In case a pass-book is lost or stolen, immediate information 
 of the same must be given to the Secretary. As the officers of 
 this corporation may be unable to identify every shareholder, 
 the corporation will not be responsible for loss sustained, when 
 the shareholder fails to notify the officers that his pass-book 
 has been lost or stolen, if his shares shall be fraudulently with- 
 drawn by another, provided, that in case of the alleged loss or 
 theft of a pass-book, the Finance Committee may at their dis- 
 cretion authorize the issue of a duplicate, or may authorize the 
 payment of the shares without the pass-book if withdrawn in 
 full, but may in either case require a bond to indemnify the cor- 
 poration for any loss it may sustain on account of the lost or 
 stolen pass-book. 
 
 ARTICLE XX. 
 
 PRICE OF SHARES. 
 
 The price of the shares of this corporation shall be as fol- 
 lows : On the date of issue, $1.00 ; on the second month, $2.02 ; 
 on the third month, $3.06 ; on the fourth month, $4.12 ; on the 
 fifth month, $5.20 ; on the sixth month, $6.30 ; provided that 
 shares issued to qualify a borrower, the price shall be $1.00, 
 $2.00, $3.00, $4.00, $5.00 and $6.00 respectively. 
 
APPENDIX. 263 
 
 ARTICLE XXI. 
 DISCHARGES OF MORTGAGES. 
 
 Any mortgage held by this corporation may be discharged 
 by the Secretary or the Treasurer upon the receipt of the 
 amount due thereon, provided that the discharge shall be ap- 
 proved in writing by one Director. 
 
 AETICLE XXII. 
 
 AMENDMENTS. 
 
 These by-laws may be amended by a two-thirds vote of the 
 members present and voting at a regular or special meeting, 
 provided, that the proposed amendments shall have been sub- 
 mitted to the corporation in writing at a meeting held at least 
 four weeks previous to action on the same. 
 
 No. 3. 
 
 The following are the articles of association or constitution 
 of The People's Building and Loan Association of the town of 
 Harrison in New Jersey. 
 
 This is one of the most successful associations in that State. 
 It was organized in 1873, and adopted the serial plan of issuing 
 its stock in August, 1874. It is a model constitution for the 
 scheme which it embodies. 
 
 CONSTITUTION. 
 ARTICLE I. 
 
 TITLE AND OBJECT. 
 
 This association shall be denominated " THE PEOPLE'S BUILD- 
 ING AND LOAN ASSOCIATION OF THE TOWN OF HARRISON." Its 
 object is to provide a means for the regular, safe and profitable 
 investment of the savings of its members ; and, by these savings, 
 to accumulate a fund for the purpose of making loans to stock- 
 holders, whereby they may be enabled to build or provide for 
 themselves dwelling-houses, or to purchase building-lots or other 
 real property. 
 
264: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 AETICLE II. 
 
 STOCKHOLDERS. 
 
 SECTION 1. The members of this association shall be resi- 
 dents of the United States. Minors may hold stock in this 
 association by guardians. A parent procuring stock for a minor 
 child may, during the minority of such child, represent him or 
 her in all the rights of membership except that of holding office. 
 When such child shall have attained the age of twenty-one 
 years, he or she shall be dealt with as the absolute owner of the 
 stock and be considered a member. 
 
 SEC. 2. A payment by any stockholder, trustee, guardian or 
 representative for a minor, of one or more installments of one 
 dollar on a share of stock shall constitute such stockholder, 
 trustee, guardian or representative for a minor, a member of 
 this association, and as such shall be subject to all fines and 
 penalties imposed by this constitution, and entitled to all the 
 privileges of membership. 
 
 SEC. 3. Each and every stockholder, trustee, guardian or 
 representative for a minor, for each and every share of stock 
 held by him or her in this association shall pay the sum of one 
 dollar, as installments, on the third Tuesday of each and every 
 month ; these payments shall be made to the Treasurer, or such 
 other person or persons as shall from time to time by the laws 
 or regulations of this association be authorized to receive the 
 same, at such hour as provided for in this constitution, and at 
 such place as the Board of Directors shall provide, the said pay- 
 ments to continue until it shall be ascertained that the value of 
 the whole stock of their respective series be sufficient to divide 
 to each share of stock in such respective series the sum of two 
 hundred dollars. The time for payments for each month shall 
 terminate as soon as the Secretary shall have waited on all 
 present and left the place of meeting. 
 
 SEC. 4. In case any stockholder, trustee, guardian or repre- 
 sentative for a minor shall neglect or refuse to pay his or her 
 monthly dues, each and every such person so neglecting or re- 
 fusing shall incur a monthly fine of five per cent, which shall 
 be charged on all sums remaining unpaid. 
 
 SEC. 5. In case any stockholder (not having taken a loan) 
 shall neglect or refuse to pay his or her monthly installments 
 
APPENDIX. 265 
 
 or fines for the space of six months each and every stockholder 
 so neglecting or refusing shall be tendered by the Treasurer the 
 amount of installments actually paid by him or her, without 
 any allowance for interest, first deducting all fines and forfeit- 
 ures that may be charged against him or her, and from that 
 time he or he shall cease to be a member of this association. 
 Provided, that such action shall not be taken against a default- 
 ing stockholder, unless he or she shall have been notified by the 
 Secretary one month previously. 
 
 SEC. 0. Any non-borrowing stockholder wishing to withdraw 
 from this association may do so by giving a written notice to 
 the Secretary five days prior to the meeting of the Board of 
 Directors, which shall be held on the evening of the third Tues- 
 day of each month, of such intention to withdraw, etc. During 
 the first year of his or her respective series of stock, he or she 
 shall be entitled to receive the actual amount of installments 
 paid in, less any fines he or she may owe. After the expiration 
 of the first year, he or she shall receive the actual amount of in- 
 stallments paid in, less any fines he or she may owe, with inter- 
 est at the rate of four per cent per annum ; after the expiration 
 of the second year, five per cent per annum ; after the expira- 
 tion of the third year, six per cent per annum ; after the expira- 
 tion of the fourth year, such percentage for the average time of 
 investment as shall be shown by the last annual report to be the 
 net earnings of the association, less the following percentage of 
 discount off said net earnings, according to the age of the re- 
 spective series of stock, to wit : after the fourth year, thirty-five 
 per cent ; after the fifth year, thirty per cent ; after the sixth 
 year, twenty-five per cent ; after the seventh year, twenty per 
 cent ; after the eighth year, fifteen per cent ; after the ninth 
 year, ten per cent ; and after the tenth year, and until the re- 
 spective series mature, five per cent. It is provided, however, 
 that at any time not more than one half of the monthly receipts 
 shall be appropriated to such redemption of stock without the 
 consent of the Board of Directors. 
 
 SEC. 7. Upon the death of a stockholder who has not re- 
 ceived a loan or loans, his or her legal representatives shall be 
 entitled to receive from this association the actual amount of 
 installments paid in on his or her stock, less any fines he or she 
 18 
 
266 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 may owe, with interest added to the same, at rates in accord- 
 ance with section six of this article ; then his or her interest in 
 this association shall terminate, unless the legal representatives 
 of such deceased shall continue the payments of installments on 
 such stock for three months after his or her decease, thereby 
 assuming the future payments on the stock. 
 
 SEC. 8. When it shall be ascertained through the Auditors 
 that the value of each share of stock in any series amounts to 
 two hundred dollars, a meeting of the stockholders in such 
 series shall be convened, at which time a division shall take 
 place ; every stockholder of the matured series shall receive the 
 sum of two hundred dollars for each share of stock held by him 
 or her in such series, or his or her securities of that amount with 
 the same fully satisfied and canceled off record, and then that 
 series shall cease and determine. 
 
 ARTICLE III. 
 
 SERIES OF STOCK AND DISTRIBUTION OF EARNINGS. 
 
 SECTION 1. A new series of stock may be commenced on and at 
 the annual meeting of the association, held on the third Tuesday 
 of September in every year ; provided the same be determined 
 on by the Board of Directors at least one month prior to the an- 
 nual meeting of the association, and public notice given thereof. 
 
 SEC. 2. It shall be the duty of the Secretary to assist the 
 Auditors in settling and adjusting the accounts of the associa- 
 tion, and determining the value of the shares in each respective 
 series prior to the annual meeting, or at any other time, as occa- 
 sion may require ; and, in order that no series of stock may be 
 given a greater percentage of the earnings of the association 
 than is due thereto, they shall distribute the net earnings of the 
 association and determine the value of the shares in accordance 
 with the following rules : Each series' investment to be multi- 
 plied by the average time invested, the results to be added to- 
 gether for a sum of results, each result to be multiplied by the 
 total net earnings of the association, the product divided by the 
 sum of results, the quotient in each case showing each series' 
 share of the net earnings. Divide each series' share of the net 
 earnings by the number of shares in that series and the result 
 will be the net gain per share. 
 
APPENDIX. 267 
 
 ARTICLE IV. 
 
 CERTIFICATES OF STOCK. 
 
 Each stockholder shall be entitled to a certificate of stock 
 issued in the name of the association under the corporate seal 
 thereof, signed by the President and attested by the Secretary ; 
 which certificate may be transferred by assignment in person or 
 by attorney in presence of the Secretary, and shall be recorded 
 in the proper book kept by the Secretary for that purpose, and 
 indorsed on the certificate, which shall be surrendered and a new 
 one issued therefor to the party to whom transferred. It is 
 provided, however, that no stock shall be transferred while any 
 fines, installments, or other liens remain charged against the 
 same, nor until the tranferree shall have assumed all the obliga- 
 tions of the original stockholders. 
 
 ARTICLE V. 
 
 OFFICERS. 
 
 The officers of this association shall be a President, Vice- 
 President, Treasurer, Secretary, eleven Directors, and three 
 Auditors, all of whom must be stockholders. 
 
 ARTICLE VI. 
 
 PRESIDENT. 
 
 The President shall be elected by the stockholders at the 
 annual meeting. It shall be his duty to preside at all meetings 
 of this association, and of the Board of Directors, to preserve 
 order therein, to sign all orders on the Treasurer for the pay- 
 ment of money when ordered by the Board of Directors, and to 
 perform all other duties usually appertaining to the office of 
 President. It shall be his duty, when so ordered by the Board 
 of Directors, to give releases and acquittances for all moneys 
 which shall be paid to the association upon any bond, bill, note, 
 mortgage, or other security, and, if necessary, acknowledge satis- 
 faction of the same on record. 
 
 ARTICLE VII. 
 
 VICE-PRESIDENT. 
 
 The Vice-President shall be elected by the stockholders at 
 the annual meeting. It shall be his duty, in the absence of the 
 
268 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 President, to preside at all meetings of the stockholders and of 
 the Board of Directors, and discharge all duties appertaining to 
 the office of President. It shall be his duty, in the event of the 
 death or resignation of the President, to perform all the duties 
 of that office until the next succeeding annual meeting. 
 
 It shall also be his duty to keep a book in which he shall 
 record the names of all persons who pay money into the treas- 
 ury, and the amount which each person paid. 
 
 AKTICLE VIII. 
 
 TREASURER. 
 
 The Treasurer shall be elected by the Board of Directors. 
 His duty shall be to receive all money paid into the association 
 from all sources whatsoever ; to deposit the same to the account 
 of the association in a regular bank of deposit designated by the 
 Board of Directors, and to pay all orders drawn upon the Treas- 
 urer by order of the Board of Directors, when signed by the 
 President and attested by the Secretary, the said orders to be 
 paid by checks drawn on the said bank, and the said checks to 
 be signed by himself, together with the President and Secretary, 
 with the seal of the association stamped thereon. It shall also 
 be his duty to receive and hold in trust for the association all 
 bonds, mortgages, and other securities on which money may be 
 loaned by the association. He shall give bond with such secur- 
 ity and for such sum as the Board of Directors may direct, for 
 the faithful performance of his duties, and at the expiration of 
 his office he shall deliver all money, bonds, mortgages, bills, 
 notes, books, papers, and all other property belonging to the 
 association in his possession, or under his control, to his suc- 
 cessor in office. 
 
 ARTICLE IX. 
 
 SECRETARY. 
 
 The Secretary shall be elected by the Board of Directors. It 
 shall be his duty to keep accurate minutes of the proceedings of 
 this association and of the Board of Directors, to record the 
 same in books to be kept for that purpose. He shall keep accu- 
 rate accounts with all the stockholders, and attest all orders 
 drawn on the Treasurer for the payment of money when so 
 ordered by the Board of Directors, and also keep all policies of 
 
APPENDIX. 269 
 
 insurance transferred to the association as collateral, and see 
 that they are kept renewed. He shall (at the expense of the 
 association) notify the stockholders of the annual meetings by 
 public notice conspicuously placed and advertisement in a news- 
 paper published in the town. He shall be prepared at all times 
 to inform the stockholders of the state of the financial concerns 
 of the association, and at the yearly meetings furnish a detailed 
 statement of the finances. He shall receive such salary as the 
 Board of Directors may direct. At the expiration of his term 
 of office, he shall deliver all books, papers, and property belong- 
 ing to the association in his possession to his successor in office. 
 It shall be his duty at each regular meeting of the Board of 
 Directors to present to said Board a list of all premiums on 
 policies of insurance held as collateral security by this associa- 
 tion, that may be coming due during the subsequent month, 
 and it shall be the duty of the Board of Directors to order a 
 draft issued on the Treasurer for a sum of money sufficient to 
 pay such premiums, unless the same shall have been paid by the 
 owners, or agents of such owners ; and the renewals of such 
 policies as shall be so paid by the Secretary shall be his vouch- 
 ers for the amount paid by him, and the balance, if any, he shall 
 pay into the treasury of this association. 
 
 ARTICLE X. 
 
 DIRECTORS. 
 
 SECTION 1. The Directors, together with the President and Vice- 
 President, shall constitute the Board of Directors. The Directors 
 shall be elected by the stockholders at the annual meeting of 
 the association. Immediately after the first election they shall 
 meet and divide themselves into three classes, and draw lots for 
 one, two and three years. Those drawing one year shall have 
 their places supplied at the next annual election ; those drawing 
 two years, shall have their places supplied at the second annual 
 election thereafter ; and those drawing three years, shall have 
 their places supplied at the third annual election thereafter. 
 At each succeeding election, Directors shall be chosen to supply 
 the places of those whose terms expire. 
 
 SEC. 2. The Board of Directors shall meet regularly on the 
 third Tuesday in each and every month at such place as they, 
 
270 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 or a majority of them, shall appoint, to receive from the stock- 
 holders their monthly installments, interest and fines, and pay 
 the same into the treasury ; to loan out the funds and see to 
 their safe investment, and to attend to the financial concerns of 
 the association generally. But if there be no quorum present, 
 then any three or more of the Directors in attendance shall be 
 authorized to receive the aforesaid monthly installments, interest 
 and fines, and offer the money for loan as specified in Article 
 XIII, section one. The Board of Directors shall also meet on 
 the evening of the second Monday following the regular meet- 
 ing, for the purpose of transacting such other business of the 
 association as may be necessary. 
 
 SEC. 3. The time of the meetings of the Board of Directors 
 from the first of May to the first of September, inclusive, in 
 each and every year, shall be 8 o'clock, p. M., and during the 
 other months of the year, 7.30 o'clock, p. M. 
 
 SEC. 4 A quorum shall consist of not less than seven. The 
 President or any Director being absent without sufficient excuse 
 for three monthly meetings successively, his office as President 
 or Director shall be declared vacant. The Board shall have 
 power to fill all vacancies that may occur until the next annual 
 meeting. In case of the absence of the President and Vice- 
 President, the Directors shall have power to elect a President 
 pro tempore. Officers of their own appointment may be removed 
 by them at pleasure. 
 
 SEC. 5. It shall be the duty of the Board of Directors to pur- 
 chase at foreclosures any property mortgaged to the associa- 
 tion, if such action shall be considered by them, or a majority 
 of them, for the benefit of the association. 
 
 AETICLE XI. 
 
 AUDITORS. 
 
 The Auditors shall be elected by the stockholders at the 
 annual meeting of the association. Immediately after the first 
 election they shall meet and draw lots for their terms of office^ 
 viz., for one, two and three years, respectively. The one draw- 
 ing for one year shall have his place supplied at the next annual 
 election; the one drawing for two years shall have his place 
 supplied at the second annual election ; and the one drawing for 
 
APPENDIX. 271 
 
 three years shall have his place supplied at the third annual 
 election. At each succeeding annual election Auditors shall be 
 chosen by the stockholders to supply the places of those whose 
 terras expire, or of a vacancy in an unexpired term. 
 
 Their duty shall be to settle and adjust the accounts of the 
 association prior to the annual meeting, and to report to the 
 stockholders with a faithful and ample exhibit of the financial 
 affairs of the association, the state of the treasury and the value 
 of the shares ; which exhibit they shall have printed at the ex- 
 pense of the association. 
 
 In the event of their neglect or refusal to furnish to the 
 stockholders at their annual meeting a detailed exhibit of the 
 finances, as hereinbefore provided, they shall be fined five dollars 
 each. 
 
 They shall have power at any time to inspect the accounts 
 of the Treasurer and Secretary, and upon five days' due notice 
 call a meeting of the stockholders. 
 
 They shall have power to fill any vacancy that may occur in 
 their number, until the next annual election ; but in the event 
 of their inability to agree upon a choice, the vacancy shall be 
 filled by the Board of Directors. 
 
 They shall superintend all elections but theirs, (which shall 
 be conducted by a committee from the Board of Directors). 
 
 ARTICLE XII. 
 
 SOLICITOR. 
 
 The Board of Directors shall appoint a solicitor for the asso- 
 ciation who shall examine all title deeds, and make the necessary 
 searches for ascertaining the title to all property offered to this 
 association as mortgage security, and give his written opinion 
 thereon. He shall prepare all bonds, mortgages, agreements and 
 all other writings to be taken or given by this association in 
 the course of its business, and also transact all other law busi- 
 ness of this Association whenever required by the Board of 
 Directors, for which he shall receive a fair compensation. 
 
 His charges for fees and disbursements in making searches, 
 recording and proving papers, for preparing all mortgages and 
 other written instruments, and for examining papers, titles and 
 other matters, shall be borne by the party applying for the loan. 
 
272 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 He is required to give such security for the faithful perform- 
 ance of his duties as the Board of Directors shall determine. In 
 all disputes as to the amount of his charges, the same shall bo 
 determined by the Board of Directors. 
 
 AETICLE XIII. 
 
 LOANS. 
 
 SECTION 1. "Whenever and as often as the sum of two hundred 
 dollars may be in the treasury, it shall be loaned out in open 
 meeting, at auction, to the highest bidder ; providing, however, 
 the said money shall not be sold at less than one per cent pre- 
 mium. Every stockholder who is not in arrears with his or her 
 monthly installments, interest and fines, shall be entitled to re- 
 ceive a loan of two hundred dollars, less the premium bid by 
 him or her, for each share of stock held by him or her in this 
 association. 
 
 SEC. 2. In addition to the premium bid for a loan (which 
 must be paid or deducted from the amount of the loan at or 
 before receiving the same), every stockholder shall be held as 
 contracting to pay all taxes that may be assessed at any time 
 upon said loan. 
 
 SEC. 3. Whenever a stockholder shall be declared to be en- 
 titled to a loan or loans, and before receiving the same, he or 
 she shall secure the payment thereof to the association by a 
 bond and mortgage for the full amount of the sum loaned, 
 and for the payment of such fines as may be imposed for the 
 failure of paying installments and interest when due, and by the 
 deposit of the policy of fire insurance, and for every loan of two 
 hundred dollars made to a stockholder at least one share of 
 stock, of the series in which he or she shall borrow, shall be 
 assigned as collateral security to said bond and mortgage. In 
 case of failure to give satisfactory security for each loan within 
 one month, the month's interest shall be charged to the borrower 
 and the loan revert to the association. No money shall be 
 loaned on any property already incumbered. Each stockholder 
 shall be entitled to borrow to the full amount of his or her 
 shares actually held by him or her at that time ; and in case 
 there should not be a sufficient amount in the hands of the 
 Treasurer, he or she will be entitled to the balance of their 
 
APPENDIX. 273 
 
 loans at the same rate from the first money that comes into the 
 treasury. 
 
 SEC. 4. It shall be the duty of the President to sell the 
 money in the treasury, in the manner aforesaid in section one 
 of this article, at a regular monthly meeting. Loans shall be 
 granted to such stockholders as shall offer or bid the highest 
 premiums therefor. 
 
 SEC. 5. Each stockholder of this association on receiving a 
 loan or loans therefrom, shall be entitled to a deduction on the 
 premium bid, of one tenth for each and every full year that has 
 expired since the series of stock in which he or she borrows was 
 issued. 
 
 SEC. 6. Stockholders taking loans from this association shall 
 pay interest monthly to the Treasurer at the rate of one half of 
 one per cent per month. Borrowers refusing or neglecting to 
 pay the interest on their loans shall incur a monthly fine of five 
 per cent for each monthly neglect on each loan of two hundred 
 dollars by them held. If the interest is suffered to remain un- 
 paid more than six months, the Board of Directors may compel 
 payment of principal and interest by ordering proceedings on 
 the bond and mortgage according to law. 
 
 SEC. 7. Stockholders shall be entitled to borrow to the 
 amount of their installments actually paid in, after the series in 
 which they shall borrow shall have been issued at least one year, 
 on their bond with interest for the same, and on transferring 
 their stock to the association as security ; and in case any stock- 
 holders borrowing upon their bond shall neglect or refuse to 
 pay their installments, interest and fines for the space of six 
 months, then the stock transferred to the association shall be 
 forfeited. 
 
 SEC. 8. No security for a loan or loans shall be deemed suffi- 
 cient unless approved of by at least two thirds of the directors 
 present at a meeting of the Board. 
 
 SEC. 9. Any borrower who is not in arrears to the association 
 may repay a loan at any time, and, in case of the repayment 
 thereof before the expiration of the eighth year after the series 
 in which his or her stock was issued, such borrowers shall be al- 
 lowed the following credit, viz., the amount of installments actu- 
 ally paid into the association on the respective series, and one 
 
274: CO-OrERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 eighth of the premium paid for said loan for every full year of 
 the said eight years unexpired, together with whatever interest 
 he or she may be entitled to receive, as provided in Article II, 
 section six. Provided, that notice of such repayment shall be 
 given in like manner as provided for stockholders withdrawing. 
 SEC. 10. This association shall have power to insure all 
 buildings upon which loans are made, and also to renew the 
 same and collect the amount paid therefor, in the same manner 
 and with like fines as installments and interest are collected un- 
 less the mortgageors shall give policies thereon and keep the 
 same renewed in good and responsible insurance companies. 
 
 AKT1CLE XIV. 
 
 REDEMPTION OF STOCK. 
 
 In the event of the money in the treasury of the association 
 not selling at or over one per cent premium, in accordance with 
 Article XIII, section one, the Board of Directors shall retain 
 the same in the treasury until the next regular monthly meet- 
 ing, when it shall be applied to the redemption of stock in the 
 oldest series and in the following manner : They shall authorize 
 the Secretary to notify the stockholders in the said series of 
 their intention of redeeming such number of shares as the 
 money in the treasury will permit and of the time and place of 
 meeting. 
 
 At the meeting so held, the present value of the shares in 
 said series shall be announced by the Secretary, whereupon the 
 President shall proceed to receive from the stockholders pres- 
 ent, by auction, bids of premium on the announced value of the 
 stock ; and the stockholder bidding the highest premium shall 
 be entitled to receive the announced value of his or her shares of 
 stock redeemed, less the rate of premium bid. For each share 
 of stock so redeemed, the stockholder selling the same shall sur- 
 render to the association his or her certificate of stock. 
 
 AETICLE XV. 
 
 MEETINGS. 
 
 Meetings of the stockholders shall be held on the third Tues- 
 day in September in each and every year. Twenty members 
 shall constitute a quorum. Special meetings shall be called by 
 
APPENDIX. 275 
 
 * 
 
 the Secretary when requested by ten members, but the object of 
 such meeting so called must be inserted in the notice. 
 
 AETICLE XVI. 
 
 ELECTIONS. 
 
 The annual election for officers shall be held on the third 
 Tuesday of September of every year, and one week's notice of 
 the place, object and time of meeting shall be given by the Secre- 
 tary as hereinbefore provided. Each member present at an 
 election shall be entitled to one vote. No stockholder shall be 
 eligible to office nor entitled to vote until he or she shall have 
 been at least three months a member. 
 
 AETICLE XVII. 
 
 FINES. 
 
 All officers neglecting to attend any annual meeting shall be 
 fined one dollar each. 
 
 The Treasurer (or deputy) for non-attendance at any month- 
 ly meeting shall be fined fifty cents. 
 
 The Secretary forfeits five dollars for neglecting to pay pre- 
 miums on any insurance policy which is not paid by the owner. 
 
 The Secretary, for neglecting to attend any meetings of the 
 Board of Directors or of the stockholders, shall be fined one dol- 
 lar. All fines shall be charged by the Secretary with the month- 
 ly dues or deducted from the salary or compensation of such 
 officers as receive any at the time of receiving the same. 
 
 AETICLE XVIII. 
 
 BY-LAWS. 
 
 The Board of Directors may enact by-laws for their own gov- 
 ernment not repugnant with this Constitution. 
 
 AETICLE XIX. 
 
 PLACE OF MEETING. 
 
 The Board of Directors, or a majority, are to select a place of 
 meeting for themselves and the association. 
 
 AETICLE XX. 
 
 This constitution shall not be altered or amended except at 
 an annual or special meeting, of which due notice shall have 
 
276 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 been given, and by a vote of two thirds of the stockholders 
 present. 
 
 AETICLE XXI. 
 
 SALARIES AND EXPENSES. 
 
 The salaries and fees of officers of this association shall be 
 fixed by the Board of Directors. All other expenses incurred 
 for books, printing, etc., must be sanctioned by the Board of 
 Directors. 
 
 No. 4. 
 
 NEW YORK. MORTGAGE. 
 
 Form of Mortgage to be taken by an Association organized 
 under the Act of 1887. 
 
 This INDENTURE made this day of , in the year 
 
 of our Lord one thousand eight hundred and , between 
 
 , of the of , and State of , part 
 
 of the first part, and " THE CO-OPERATIVE SAVINGS AND 
 
 LOAN ASSOCIATION of the of , in the county of 
 
 and State of New York, a corporation duly organized 
 
 under the provisions of Chapter 556 of the laws of 1887 of the 
 said State of New York, party of the second part, WITNESSETH that 
 the said part. . of the first part, in consideration of the sum 
 
 of dollars duly paid, the receipt whereof is hereby duly 
 
 acknowledged, ha . . sold and by these presents do . . grant and 
 convey to the said party of the second part, its successors and 
 
 assigns, all that tract or parcel of land situate in the of 
 
 county of , and State of New York 
 
 [Here insert description of mortgaged premises.] 
 
 This grant is intended as a security for the payment of the 
 
 sum of dollars, together with interest thereon at the rate 
 
 of six per cent per annum, in the manner and at the times pro- 
 vided in and required by the by-laws of the said party of the 
 second part and the said act under the provisions of which the 
 said party of the second part is incorporated, special reference 
 
APPENDIX. 277 
 
 being had to such portions of said act and the said by-laws as re- 
 late particularly to loans made to borrowers and the payment of 
 such loans and the interest thereon and the payment of fines in 
 case of defaulted payments thereby required, and the said provis- 
 ions shall be deemed a part of this instrument as fully and com- 
 pletely as though set forth at length herein, according to the 
 conditions of a bond this day executed and delivered by the 
 
 said to the said party of the second part ; and this 
 
 conveyance shall be void if such payment be made as herein 
 specified. But in case default shall be made in the payment of 
 the principal sum hereby intended to be secured, or in the pay- 
 ment of the interest thereon, or of any part of said principal or 
 interest as above specified, it shall be lawful for the party of the 
 second part, its successors or assigns, at any time thereafter, to 
 sell the premises hereby granted, or any part thereof, in the 
 manner prescribed by law, and retain the amount then due for 
 principal, interest and fines, together with the costs and charges 
 of making such sale, and the overplus, if any there be, shall be 
 paid by the party making such sale, on demand, to the said 
 , heirs or assigns. 
 
 AND IT IS HEREBY FURTHER EXPRESSLY AGREED that should 
 
 any default be made in the payment of said principal sum or 
 the interest thereon, or any part of said principal and interest, 
 as hereinbefore provided to be paid, and the same remain un- 
 paid and in arrears for the time of six months, or should any 
 tax or assessment levied or imposed upon the premises here- 
 inbefore described, become due and payable and remain unpaid 
 by the part., of the first part for the time of six months, 
 then and from thenceforth, that is to say, after the lapse of the 
 said six months, in either of the aforesaid events, the aforesaid 
 principal sum or any and all sums then unpaid, with all arrear- 
 ages of interest and fines thereon, shall, at the option of the 
 said party of the second part, its successors or assigns, become 
 and be due and payable immediately thereafter, although the 
 period first above limited for the payment thereof may not then 
 have expired, anything hereinbefore contained to the contrary 
 thereof in any wise notwithstanding. 
 
 AND IT IS FURTHER ALSO HEREBY EXPRESSLY AGREED by and 
 
 between the parties to this instrument that the said part. . of 
 
278 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the first part shall keep the buildings erected and to be erected 
 upon the lands hereinbefore described insured against loss and 
 damage by fire and pay the premiums therefor and assign the 
 policy and certificate thereof to the said party of the second 
 part as a collateral security hereto, and in default thereof it 
 shall be lawful for the said party of the second part to effect 
 such insurance, and the premium or premiums paid for secur- 
 ing such insurance and continuing the same, shall be a lien on 
 such mortgaged premises added to the amount secured by these 
 presents, and payable on demand with interest at the rate of 
 six per cent per annum. 
 
 IN WITNESS WHEREOF, the part., of the first part ha.. 
 
 hereunto set hand. . and seal. . the day and year first 
 
 above written. 
 
 Sealed and delivered 
 
 in the presence of (L. S.) 
 
 State of New York, 
 
 ' -ss. 
 
 County of ) 
 
 On this day of , in the year of our Lord one 
 
 thousand eight hundred and , before me, the subscriber, 
 
 personally appeared 
 
 to me known to be the same person. . described in and who exe- 
 cuted the within instrument and and acknowledged that 
 
 . .he. . executed the same. 
 
 No. 5. 
 
 NEW YORK. BOND. 
 
 Form of a Bond when the Association is incorporated under the 
 Act of 1887. 
 
 KNOW ALL MEN BY THESE PRESENTS that 1, , of the 
 
 ...... of , in the County of , and State of New 
 
 York, am firmly held and bound unto THE CO-OPERA- 
 TIVE SAVINGS AND LOAN ASSOCIATION of the of 
 
 in the County of and State of New York, a corporation 
 
APPENDIX. 279 
 
 duly organized under the provisions of Chapter 556 of the 
 
 laws of 1887 of the State of New York, in the sum of 
 
 dollars, lawful money of the United States of America, to be 
 
 paid to the said THE CO-OPERATIVE SAVINGS AND LOAN 
 
 ASSOCIATION, its successors or assigns. For which payment, 
 well and truly to be made, I hereby bind myself, my heirs, ex- 
 ecutors, and administrators, jointly and severally, firmly by 
 
 these presents. Sealed with my seal and dated this day 
 
 of , one thousand eight hundred and 
 
 THE CONDITION OF THE ABOVE OBLIGATION IS SUCH, that if 
 
 the above bounden , his heirs, executors, or adminis- 
 trators shall well and truly pay or cause to be paid unto the 
 above-named THE CO-OPERATIVE SAVINGS AND LOAN ASSO- 
 CIATION, its successors or assigns, the sum of dollars, 
 
 together with interest thereon at the rate of six per cent per 
 annum, in the manner and at the times provided in and re- 
 quired by the by-laws of the said THE CO-OPERATIVE 
 
 SAVINGS AND LOAN ASSOCIATION and the said act under the pro- 
 visions of which the same is incorporated, special reference 
 being had to such portions of each thereof as relate particularly 
 to loans made to borrowers and the repayment of such loans 
 and the interest thereon, and the payment of fines in case of 
 defaulted payments thereby required, and the said provisions 
 shall be deemed a part of this obligation as fully and com- 
 pletely as though set forth at length herein, without fraud or 
 delay, then the preceding obligation to be void, otherwise to 
 remain in full force and virtue. 
 
 AND IT is HEREBY EXPRESSLY AGREED that should any default 
 be made in the payments upon said principal and interest or 
 either of them or any part thereof, as hereinbefore agreed to be 
 made, and the same shall remain unpaid and in arrears for the 
 time of six months, (or should any tax or assessment levied or 
 imposed upon the premises described in the mortgage accom- 
 panying this bond, become due and payable, and remain unpaid 
 by the obligor herein for the time of six months*), then and from 
 
 * In the event the bond is secured in full by a pledge of stock, the 
 clauses relating to taxes, assessments, and insurance will be omitted. 
 An association, in the preparation of its blanks, should, as a matter of 
 
280 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 thenceforth, that is to say, after the lapse of said six months, 
 the aforesaid principal sum or any and all sums thereof then 
 remaining unpaid, with all arrearages of interest and fines there- 
 on, shall, at the option of the said THE CO-OPERATIVE SAVINGS 
 AND LOAN ASSOCIATION, its successors or assigns, become due 
 and payable immediately thereafter, although the period first 
 above specified for the payment thereof may not have expired, 
 anything hereinbefore contained to the contrary notwithstanding. 
 
 AND IT IS FURTHER HEREBY EXPRESSLY AGREED by and be- 
 
 tween the parties to these presents that the said obligor shall 
 keep the buildings erected and to be erected upon the lands de- 
 scribed in the mortgage accompanying this bond insured against 
 loss and damage by fire, in an amount and by insurers approved 
 by the said obligee, its successors or assigns, and pay the pre- 
 miums therefor, and assign the policy and certificate thereof 
 to the said obligee as a collateral security hereto, and in default 
 thereof it shall be lawful for the said obligee to effect such in- 
 surance, and the premium or premiums paid for securing such 
 insurance shall be added to the principal sum hereby secured to 
 be paid, and shall be payable on demand with interest at the 
 rate of six per cent per annum.* 
 Sealed and delivered 
 in the presence of (L. S.) 
 
 State of New York, ) sg 
 
 County of ) 
 
 On this day of , in the year of our Lord one 
 
 thousand eight hundred and , before me, the subscriber, 
 
 personally appeared , to me known to be the same person 
 
 described in and who executed the foregoing instrument, and 
 duly acknowledged that . .he. . executed the same. 
 
 convenience, have them printed in "both ways, one for a " stock loan " 
 and one for a " mortgage loan." 
 * Ibid. 
 
APPENDIX. 281 
 
 No. 6. 
 
 NEW YORK. MORTGAGE. 
 
 Form of Mortgage to be taken by an Association incorporated 
 under the Act of 1851. 
 
 This INDENTURE made this day of , in the year 
 
 of our Lord one thousand eight hundred and , between 
 
 of the of , county of , and State of 
 
 , part . . of the- first part, and the association of 
 
 the of , in the county of , and State of New 
 
 York, party of the second part, WITNESSETH that the said par- 
 
 t . . of the first part, in consideration of the sum of 
 
 dollars duly paid, the receipt whereof is hereby acknowledged, 
 ha. . sold and by these presents do. . grant and convey to the 
 said party of the second part, its successors or assigns, all that 
 
 tract or parcel of land situate in the of , county 
 
 of , and State of New York, 
 
 [Here insert description of mortgaged premises.] 
 
 This grant is intended as a security for the payment of the 
 
 sum of dollars, with interest thereon at the rate of six 
 
 per cent per annum, in the manner and at the times provided 
 in and required by the articles of association and by-laws of 
 the party of the second part hereto, special reference being had 
 to such portions of each thereof as relate particularly to loans 
 made to borrowers, and the payment of such loans and interest 
 thereon, and fines upon defaulted payments, to which said 
 articles of association and by-laws reference is hereby made for 
 the times and the manner of the payment of said sum, with in- 
 terest thereon, and the same are hereby deemed to be a part of 
 this instrument as fully and completely as though fully set forth 
 at length herein, according to the condition of a bond this day 
 
 executed and delivered by the said to the said party of 
 
 the second part ; and this conveyance shall be void if payments 
 be made as herein specified. 
 
 But in case default be made in the payment of the principal 
 19 
 
282 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 sum hereby intended to be sccaired or in the payment of the 
 interest thereon, or in any part of such principal or interest or 
 fines upon defaulted payments as above provided, it shall be 
 lawful for the party of the second part, its successors or assigns, 
 at any time thereafter, to sell the said premises hereby granted, 
 or any part thereof, in the manner prescribed by law, and out of 
 the moneys arising from said sale to retain the amount then 
 due for principal, interest, and fines, together with the costs 
 and charges for making such sale, and the overplus, if any 
 there be, shall be paid by the party making such sale, on de- 
 mand, to the said , heirs, executors, and assigns. 
 
 AND IT IS FURTHER HEREBY EXPRESSLY AGREED that should 
 
 any default be made in the payment of said principal and in- 
 terest, or of any part thereof, at any time when the same is made 
 payable as hereinbefore provided, and the same shall remain 
 unpaid and in arrears for the time of six months, or should any 
 tax or assessment levied or imposed upon the premises herein- 
 before described become due and payable and remain unpaid 
 by the part. . of the first part for the time of six months, then 
 and from thenceforth, that is to say, after the lapse of the said 
 six months, the aforesaid principal sum or any and all sums 
 then unpaid, with all arrearages of interest and fines thereon, 
 shall, at the option of the said party of the second part, its suc- 
 cessors or assigns, become and be due and payable immediately 
 thereafter, although the period hereinbefore provided for the 
 payment thereof may not then have expired, anything herein- 
 before contained to the contrary thereof in any wise notwith- 
 standing. 
 
 [Here insert the clause relating to insurance as found in the 
 preceding form of mortgage under the act of 1887. Also the 
 attestation clause and acknowledgment as there found.] 
 
 No. 7. 
 
 NEW YORK. BOND. 
 
 Form of Bond to be taken by an Association incorporated under 
 the Act of 1851. 
 
 KNOW ALL MEN BY THESE PRESENTS that I, , of 
 
 the of , in the county of , and State 
 
APPENDIX. 283 
 
 of New York, am held and firmly bound unto THE 
 
 ASSOCIATION OF THE of , in the county of 
 
 , and State of New York, in the sum of 
 
 dollars, lawful money of the United States, to be paid to the 
 
 said association, or to its successors or assigns, for 
 
 which payment well and truly to be made bind 
 
 and heirs, executors or administrators, jointly and sever- 
 ally, firmly by these presents. 
 
 Sealed this day of ...... in the year of our Lord one 
 
 thousand eight hundred and 
 
 THE CONDITION OF THIS OBLIGATION IS SUCH THAT, if the 
 
 above bounden , heirs, executors, or administrators, 
 
 shall and do well and truly pay or cause to be paid unto the 
 
 above-named association, its successors or assigns, the 
 
 sum of dollars, with interest thereon at the rate of six per 
 
 cent, per annum, in the manner and at the times provided in 
 and required by the articles of association and by-laws of the 
 obligee herein, special reference being had to such portions of 
 each thereof as relate particularly to loans made to borrowers 
 and the payment of such loans, principal, interest, and fines 
 upon defaulted payments, and to which said articles of associa- 
 tion and by-laws reference is hereby made for the times and 
 conditions of the payment of said sum, with interest thereon, 
 and fines in case of defaulted payments, and which portions of 
 said articles of association and by-laws shall be deemed a part 
 of this obligation as fully and completely as though stated at 
 length herein, without fraud or delay, then the preceding ob- 
 ligation to be void; otherwise to remain in full force and 
 virtue. 
 
 AND IT IS FURTHER HEREBY EXPRESSLY AGREED, that should 
 
 any default be made in the payment of the said principal or 
 interest or any part thereof as the same are hereinbefore pro- 
 vided to be paid, and the same shall remain unpaid and in 
 arrears for the time of six months (or should any tax or assess- 
 ment be levied or imposed upon the premises described in the 
 mortgage accompanying this bond, become due and payable, 
 and remain unpaid by the obligor herein for the time of six 
 months), then and from thenceforth, that is to say, after the 
 lapse of the said six months in either of the preceding events, 
 
284: CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 the aforesaid principal sum, or any and all sums then unpaid, 
 with arrearages of interest and fines thereon, shall, at the option 
 
 of the said association, its successors or assigns, become 
 
 and be due and payable immediately thereafter, although the 
 period first above provided for the payment thereof may not 
 then have expired, anything hereinbefore contained to the con- 
 trary notwithstanding.* 
 
 No. 8. 
 
 TREASURER'S BOND. 
 
 KNOW ALL MEN BY THESE PRESENTS that WC, 
 
 are held and firmly bound unto The Co-operative 
 
 Savings and Loan Association of , in the county of 
 
 , and State of , in the sum of thousand 
 
 dollars, lawful money of the United States, to be paid to the 
 
 said Co-operative Savings and Loan Association, its 
 
 successor or assigns, for which payment well and truly to be 
 made, we do hereby bind ourselves, our heirs, executors, and 
 administrators jointly and severally, firmly by these presents. 
 
 Sealed with our seals and dated the day of , 
 
 18... 
 
 Whereas the above bounden has been duly elected 
 
 Treasurer of The Co-operative Savings and Loan Asso- 
 ciation, 
 
 Now, THEREFORE, the condition of the above obligation is 
 such, that if the said shall well, faithfully, and hon- 
 estly in all things perform the duties of said office during his 
 continuance in office, and shall, at the expiration of his said 
 
 * In the event the bond is accompanied by a mortgage, add the 
 clause found in the preceding form of "bond under the act of 1887, in 
 reference to insurance ; and in the event the bond is not accompanied 
 by a mortgage, omit from the foregoing form the clause relating to taxes 
 and assessments. The suggestions in the notq to the preceding form 
 for the bond under the act of 1887 are also applicable to the preparation 
 of blanks under the act of 1851. For acknowledgment to this bond, 
 see preceding forms. 
 
APPENDIX. 285 
 
 office, or whenever and as often as required, make and render 
 
 unto said Co-operative Savings and Loan Association, or 
 
 the Board of Directors thereof, a just and true account of all 
 moneys, securities, property, and other things which shall come 
 into his possession, custody, control, or charge as such officer, 
 and shall pay and deliver over to his successor in office, or any 
 other person duly authorized to receive the same, all sums of 
 money, securities, property, and other things belonging to said 
 
 Co-operative Savings and Loan Association, and in 
 
 his possession, control, or charge as Treasurer, then this obliga- 
 tion to be void, otherwise to remain in full force and effect. 
 
 (L.S.) 
 
 (L.S.) 
 
 [The acknowledgment same as in form No. 5.] 
 
 No. 9. 
 
 ASSIGNMENT OF STOCK TO SECURE A LOAN. 
 
 KNOW ALL MEN BY THESE PRESENTS that I, , of the 
 
 of , in the county of , and State of , in 
 
 consideration of a loan made to me by The Co-operative 
 
 Savings and Loan Association of $ , have agreed to assign 
 
 and transfer and do hereby assign and transfer unto the said 
 association, its successors and assigns, all my right, title, and 
 
 interest in and to shares of series No , also 
 
 shares of series No , of the capital stock of the said asso- 
 ciation now belonging to me and standing in my name, as a 
 security, collateral to my bond this day given to said association 
 for the payment of said loan and interest thereon at the time 
 and times and in the manner therein mentioned. And I hereby 
 authorize said association, in case I should make default in the 
 payment of said loan and interest thereon or any part thereof 
 as required by said bond, and shall so remain in default for six 
 months, to cancel said shares of stock above described and apply 
 the withdrawal value thereof at such time upon my said loan, 
 and in the event any surplus remains after the full payment of 
 said loan and interest thereon and fines, the same shall be paid 
 
286 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 to me, my executors, administrators, or assigns, and I hereby 
 covenant and agree with said association to continue to pay dues 
 upon said shares of stock until said loan shall be wholly paid. 
 
 In witness whereof I have hereunto set my hand this 
 
 day of ,18... 
 
 [Acknowledgment same as in form No. 5.] 
 
 No. 10. 
 
 NOTICE OF REPAYMENT OF LOAN AND WITH- 
 DRAWAL OF STOCK. 
 
 To the Board of Directors of the Co-operative Savings 
 
 and Loan Association. 
 
 GENTLEMEN: Please take notice that I have repaid my loan 
 
 of shares, less the withdrawal value of the following 
 
 shares of stock which the association holds as security for the 
 
 payment of said loan, viz., shares in series No 
 
 and shares in series No 
 
 I further also hereby give notice of my desire to withdraw 
 said shares of stock and have the withdrawal value thereof ap- 
 plied upon said loan, thereby completing the payment of the 
 same; and for such purpose I hereby authorize you to direct 
 that the order issued to pay such withdrawal value be made pay- 
 able to the Treasurer of said association. 
 
 I request that you duly authorize the proper officers to ex- 
 ecute a discharge of my mortgage to the association. 
 
 No. 11. 
 
 WITHDRAWAL NOTICE. 
 
 To the Board of Directors of the Co-operative Savings 
 
 and Loan Association. 
 
 GENTLEMEN : I hereby give notice of my desire to withdraw 
 the following shares of stock owned by me and standing in my 
 
 name on the books of your association, viz., shares, series 
 
 ; shares, series 
 
APPENDIX. 287 
 
 I hereby direct that the order issued for such withdrawal 
 value be made payable to the order of myself. 
 Dated, 18... 
 
 No. 12. 
 
 STOCK PROXY. 
 
 KNOW ALL MEN BY THESE PRESENTS that I, , a 
 
 stockholder in The Co-operative Savings and Loan Asso- 
 ciation, have appointed and do hereby appoint , my 
 
 true and lawful attorney, with power of substitution and revo- 
 cation for me and in my name to vote, as fully as 1 might do if 
 personally present, at the annual (or special) meeting of the 
 
 stockholders of said association, to be held on the day of 
 
 ,18... 
 
 Witness my hand this day of ....... 18. .. 
 
 State of i 
 
 County of . . \ ss ' 
 
 On this day of ,18. ., before me, the subscriber, 
 
 personally appeared , to me known to be the same per- 
 son named in and who signed the foregoing proxy, and duly ac- 
 knowledged that . . he . . executed the same. 
 
 No. 13. 
 
 DESCRIPTION OF SECURITIES OFFERED BY BOR- 
 ROWER AND REPORT OF FINANCE COM- 
 MITTEE THEREON. 
 
 To the Board of Directors of the Co-operative Savings 
 
 and Loan Association : 
 GENTLEMEN : For the purpose of securing the repayment of 
 
 the loan of shares, amounting to $ , which you 
 
 have awarded to me, in addition to the usual bond required and 
 as collateral thereto, I offer you the securities following : 1st., 
 shares of series No of your association, now 
 
288 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS- 
 
 standing in my name and upon which such loan is made 
 
 shares of series No , shares of series No ; 
 
 2d., a first mortgage on real estate known as No on 
 
 Street. The lot is feet front and rear, and 
 
 deep. There is situate on said lot a dwelling-house 
 
 facing Street, having stories. The first story 
 
 contains rooms finished ; the second story con- 
 tains . . , . rooms . . . finished. . . 
 
 There is also on the lot 
 
 The buildings are in repair and insured as follows : 
 
 Dwelling-house at $ ; barn at $ 
 
 The premises are assessed for taxation at $ 
 
 Dated ,18 
 
 The undersigned Finance Committee hereby report that they 
 have personally examined the real estate described in the fore- 
 going application and find such description substantially cor- 
 rect, except 
 
 We appraise the value thereof at $ and approve of the 
 
 same for a loan of $ , provided the mortgage is accom- 
 panied by an abstract of title approved by the attorney of the 
 association and contains suitable provisions for insurance upon 
 the buildings against loss by fire or lightning for the benefit of 
 the association. 
 
 Dated., .,188.. 
 
 v Finance Com. 
 
APPENDIX. 289 
 
 No. 14. 
 
 CERTIFICATE OF STOCK. 
 
 Series No Issue of 18. .. 
 
 THE CO-OPEEATIVE 
 
 SAVINGS AND LOAN ASSOCIATION, 
 
 ,N.Y. 
 
 shares. No 
 
 This is to certify that is entitled to shares, 
 
 series No of the capital stock of The Co-opera- 
 tive Savings and Loan Association, transferable only on the 
 books of the said association in person or by attorney, in the 
 presence of the President or Secretary, upon surrender of this 
 certificate. 
 
 Given under the seal of the association at , 
 
 (US -> N.Y,. ..is.. 
 
 ., President. 
 ., Secretary. 
 
 No. 15. 
 
 FORM OF ASSIGNMENT OF SHARES OF STOCK. 
 
 (to be printed on the back of the certificate). 
 For value received I do hereby sell, assign, transfer, and set 
 
 over unto all my right, title, and interest in and to 
 
 shares, series No of the capital stock of The 
 
 Savings and Loan Association, and I do hereby consti- 
 tute and appoint my true and lawful attorney, irrev- 
 ocable, for me and in my name and behalf to assign and trans- 
 fer to the said shares of capital stock hereby sold and 
 
 for that purpose to do all acts and execute all papers necessary 
 to perfect such sale and transfer upon the books of said associa- 
 tion. 
 
 Witness my hand and seal this day of , 18. . . 
 
 (L.S.) 
 
 [Acknowledgment clause same as in form No. 5.] 
 
290 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 No. 16. 
 
 SHAREHOLDER'S PASS-BOOK. 
 
 18... 
 
 Dollars. 
 
 Cents. 
 
 March 
 April.. 
 May... 
 June . . 
 
 July 
 
 August 
 
 September 
 
 October.. . 
 
 November . . 
 
 December , 
 
 January , 
 
 February 
 
 The above is a convenient form for the pass-book. The 
 front cover has written upon it the name of the shareholder. 
 One page, as above given, covers a year of time, in an associa- 
 tion, of monthly dues. The officer receipting for the money 
 fills in the amount paid opposite the month and signs his name 
 to the right. The book can be made up to cover any length of 
 time desired. Between each leaf should be bound in a thin 
 blotting-paper, so that the receipting officer can close the book 
 at once on making the entries, as a matter of saving time. 
 
APPENDIX. 
 
 291 
 
 No. 17. 
 
 ANNUAL REPORT. 
 
 The annual Report of the Co-operative Savings 
 
 and Loan Association from , 18. ., to , 18. . 
 
 RECEIPTS. 
 
 Cash at last report. . . 
 
 Dues 
 
 Interest.. 
 
 Fines 
 
 Entrance fees 
 
 Transfer fees 
 
 Premiums 
 
 Loans repaid 
 
 Dues paid in advance. 
 Borrowed money 
 
 Total. 
 
 PEOFITS. 
 
 Undivided profits at 
 last report.. 
 
 Interest 
 
 Premiums 
 
 Fines 
 
 Entrance fees 
 
 Transfer fees 
 
 Profits on withdrawals 
 
 Total. 
 
 DISBURSEMENTS. 
 
 Mortgage loans. 
 
 Stock loans 
 
 Stock withdrawn 
 
 Matured stock 
 
 Salary of secretary . . . 
 Salary of treasurer. . . 
 
 Rent 
 
 Account-books 
 
 Printing 
 
 Paid borrowed money. 
 Balance cash.. 
 
 Total. 
 
 LOSS. 
 
 Salaries 
 
 Rent 
 
 Account-books 
 
 Printing 
 
 Incidental expenses . . 
 
 Amount dividends de- 
 clared 
 
 Balance undivided 
 profits. 
 
 Total. 
 
 ASSETS. 
 
 Loans secured by first mortgage on real estate. 
 Loans secured by pledge of stock of the association. . . 
 
 Dues, interest, and fines in arrears 
 
 Cash in the treasury 
 
 Other personal property 
 
 Total. . 
 
292 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 LIABILITIES. 
 
 Capital stock, .... series, ____ shares at 
 
 Dues and interest paid in advance 
 Undivided profits 
 Borrowed money 
 
 Total 
 
 STATISTICS. 
 
 Total number of shares outstanding 
 
 Total number of shareholders 
 
 Greatest number of shares held by one shareholder. 
 Total number of shares borrowed upon 
 
 Total number of borrowers 
 
 Largest loan 
 
 NUMBER OF SHARES BORROWED UPON IN EACH SERIES. 
 
 series series series series. 
 
 shares . . . . shares . . . . shares . . . . shares. 
 
 AMOUNT DUES PAID, AMOUNT OF PROFITS, HOLDING VALUE, AND 
 WITHDRAWAL VALUE OF ONE SHARE IN EACH SERIES. 
 
 Amount dues paid series series series 
 
 Amount of profits 
 
 Holding value 
 
 Withdrawal value 
 
 Dated ,18.. 
 
 , Secretary. 
 
 The undersigned, auditing committee of the stockholders, 
 hereby report that they have carefully examined the books of 
 the Secretary, and verified the entries therein, and find the fore- 
 going report correct in all respects. 
 Dated ,18.. 
 
 C Auditing Committee. 
 
APPENDIX. 
 
 293 
 
 No. 18. 
 
 SECRETARY'S MONTHLY REPORT. 
 
 YEAR. 
 
 Total 
 shares 
 out- 
 stand- 
 ing. 
 
 Dues 
 paid. 
 
 Total 
 shares 
 bor- 
 rowed 
 upon. 
 
 Inter- 
 est 
 paid. 
 
 Fines 
 paid. 
 
 En- 
 trance 
 fees 
 paid. 
 
 Trans- 
 fer 
 fees 
 paid. 
 
 Pre- 
 miums 
 paid. 
 
 Total re- 
 ceipts ex- 
 clusive of 
 loans re- 
 paid. 
 
 
 Jan... 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Feb... 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 March 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 April.. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Stock v ithdrawn. 
 
 Loans repaid. 
 
 Ex- 
 penses 
 paid. 
 
 Remarks. 
 
 Series 
 No. 
 
 No. 
 of 
 shares. 
 
 Amount 
 paid. 
 
 Profits 
 retained 
 by asso- 
 ciation. 
 
 Series 
 No. 
 
 No. 
 of 
 shares. 
 
 Amount 
 
 
 
 
 
 
 
 
 
 
 
 
 
 NOTE. The lower part of the above form belongs on the 
 right of the upper part. In preparing a blank for use it should 
 be so placed, and the rulings across the page extended to in- 
 clude a year. If the association has become the owner of real 
 estate, and receives rents, a proper heading and ruling should 
 be inserted to enter them. 
 
GENERAL INDEX. 
 
 Accounts, complexity of, in gross 
 plan, 86, 102. 
 
 how to keep them, 179-208. 
 
 importance of accurate, 179. 
 Account-books, names of those ne- 
 cessary, 181. 
 
 See FORMS. 
 
 Administrator, rights of, 164. 
 Appraisers, 153, 288. 
 
 suggestions for, 128. 
 Articles of association, 139-178, 263. 
 
 amendment of, 173. 
 
 filing, 176, 177. 
 
 how executed, 174. 
 
 preamble to, 142. 
 Associations, wrongly classified as 
 
 building and loan, 94, 95. 
 Attorney, his duties, 127, 152. 
 
 how appointed, 147. 
 Auditing committee, 154. 
 
 Balance-sheet, form of, 197. 
 Blank forms. See FORMS. 
 Bonds of officers, 124, 150. 
 Bonus, 77. 
 Books of account, 181. 
 
 how to keep them, 179-208. 
 
 See FORMS. 
 Borrower, advantages to, 105, 106. 
 
 how premium affects, 27, 78, 106. 
 
 manner of borrowing, 23, 158. 
 
 manner of paying his loan, 1G2. 
 
 Borrower, security required from, 
 
 25, 161. 
 to what amount he may borrow, 
 
 22, 157. 
 who may become a borrower, 23, 
 
 78, 157. 
 
 Borrowing money, 215. 
 Building associations, 8, 42. 
 
 the first, 42. 
 Building and loan associations, 7, 
 
 41-69, 70-95. 
 which of the several schemes the 
 
 best. 97-112. 
 By-laws, 21, 130, 173. 
 adoption of, 136, 216. 
 framing of, 121. 
 precedents for, 247, 254. 
 
 Capital, accumulated savings, 17, 
 
 143. 
 
 constantly changing, 17. 
 represented by shares of stock, 16. 
 Capital stock, how increased or 
 
 diminished, 225. 
 Certificate of incorporation. See 
 
 FORMS. 
 
 how made evidence, 226. 
 Certificate of stock, 137, 145. 
 form of assignment of. See 
 
 FORMS. 
 
 how assigned, 145. 
 Committee, finance, 153. 
 
296 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Committee, auditing, 154. 
 Connecticut, building and loan as- 
 sociations of, 52. 
 Co-operation, a brief discussion of, 
 
 1-8. . 
 
 Co-operative banks. See MASSA- 
 CHUSETTS. 
 
 Co-operative savings and loan as- 
 ' sociations, 16. 
 
 a generic name to include all as- 
 sociations of this class, 8. 
 benefits resulting from, 9-15. 
 how to organize under New York 
 
 act of 1887, 113-136. 
 how to organize under New York 
 
 act of 1851, 138-178. 
 review of the development of the 
 schemes upon which they are 
 conducted, 70-95. 
 serial plan, 72. 
 their growth and spread in the 
 
 United States, 41-^9. 
 their safety discussed, 38-40. 
 terminating plan, 71-72. 
 the typical association described, 
 
 16-40. 
 
 which scheme is the best? 97- 
 112. 
 
 Directors, board of, who consti- 
 tutes, 38. 
 
 how elected, 39, 123. 
 their duties, 38, 39. 
 their meetings, 130, 155. 
 Distribution of profits, closing of 
 
 books to make, 191-197. 
 how made, 27-34, 166, 191-199. 
 when made, 18, 166. 
 Dividends, borrower does not get 
 back his premium in dividends 
 upon his stock, 78, 108. 
 how declared, 27-34, 191, 199. 
 Division of labor, benefits resulting 
 
 from, 4-6. 
 
 discontent produced by, 5. 
 indirect co-operation, 4. 
 Dues cease when stock matures, 17, 
 145. 
 
 Dues, fines in case payment of, de- 
 faulted, 22, 135, 164. 
 prompt payment of, desirable, 22, 
 
 135. 
 
 what are dues, 17, 145. 
 when paid, 21, 76, 98, 130, 145. 
 who receives, 21, 77, 98. 
 
 Entrance fee, defined, 21. 
 proper sum for, 135 -145. 
 Equality of benefits, 103. 
 Exemptions, 217, 226. 
 
 Finance committee, duties of, in 
 
 passing upon securities, 127-130, 
 
 153. 
 
 how appointed, 127, 153. 
 how long to serve, 127, 153. 
 receipt of dues by, 2, 21, 127, 153. 
 Fines, amount of, 22, 135, 164, 235. 
 
 why imposed, 22, 135, 164. 
 Forced withdrawals, 37, 76. 
 Forms, agreement to unite in for- 
 mation of association, 114. 
 affidavit to articles of association, 
 
 177. 
 
 annual report, 291. 
 assignment of stock, 289. 
 assignment of stock to secure a 
 
 loan, 285. 
 bond accompanying mortgage, 
 
 278,282. 
 books of account, main set of, 
 
 cash-received book, 185. 
 
 dues, interest, and fines book, 
 182. 
 
 journal day-book, 188. 
 
 ledger, 194. 
 books of account, auxiliary set of, 
 
 insurance-expiration book, 204. 
 
 secretary's security register, 
 206. 
 
 stock journal day-book, 200. 
 
 stock ledger. Part I, 201. 
 
 stock ledger, Part II, 202. 
 
 stock trial-balance book, 244. 
 
 treasurer's security register, 
 266. 
 
GENERAL INDEX. 
 
 297 
 
 Forms, by-laws, under Massachu- 
 setts law, 251-203. 
 
 by-laws, uuder New York act of 
 1887, 247-253. 
 
 certificate attached to articles of 
 association, 176. 
 
 certificate by incorporators, 119. 
 
 certificate by Secretary of State, 
 119. 
 
 certificate of stock, 289. 
 
 mortgage, New York, 276, 281. 
 
 notice repayment of loan, 286. 
 
 report of insurance committee, 
 288. 
 
 secretary's monthly report, 293. 
 
 shareholder's passbook, 290. 
 
 stock proxy, 287. 
 
 treasurer's bond, 284. 
 
 withdrawal notice, 286. 
 
 Gross plan of premiums explained, 
 80-87. 
 
 Habits of saving, cultivation of, 9. 
 Holding value, definition of, 19. 
 Home, sweet home, 11. 
 how to get one, 13, 14. 
 
 Elinois, building and loan associa- 
 tions of, 58-60. 
 
 Incorporation, procedure in, 115- 
 120, 138-178. 
 
 Installment plan of premiums ex- 
 plained, 88-91. 
 
 Interest, effect of premium upon, 
 
 27, 105-111. 
 how paid, 25, 158. 
 rate of, 25, 91, 158. 
 
 Interest premium plan explained, 
 88-91. 
 
 Iowa, building and loan associa- 
 tions of, 64. 
 
 Loans, forced collection of, 27, 163. 
 how paid, 26, 162. 
 how right to a loan is determined, 
 
 23, 59. 
 limit of. 22, 157. 
 
 Loans, mortgage loan defined, 25. 
 
 safety of loans, 25, 97. 
 
 security required for, 25, 161. 
 
 stock loan defined, 25. 
 
 to whom made, 22, 157. 
 
 when made, 24, 158. 
 
 who passes upon sufficiency of, 
 
 24, 153. 
 Loss, liabilities of, discussed, 34-37. 
 
 Maine, building associations of, 51. 
 
 Married women as stockholders, 144. 
 
 Maryland, building and loan asso- 
 ciations of, 65, G6. 
 
 Massachusetts, co-operative banks 
 
 of, 49-51, 107. 
 law of, 236. 
 
 Matured share, 17, 75, 144. 
 
 Meetings, directors 1 , 130, 155. 
 stockholders 1 , 130, 154, 156. 
 
 Michigan, building and loan asso- 
 ciations of, 62. 
 
 Minnesota, building and loan asso- 
 ciations of, 62, 63. 
 
 Minors, how stock is held for, 144. 
 
 Missouri, building and loan associa- 
 tions of, 64. 
 
 Moneys i-eceived, how apportioned, 
 20, 171. 
 
 Mortgages, foreclosure of, 27. 
 forms for. See FORMS. 
 payment of, 25, 26. 
 
 Mutual Home and Savings Associa- 
 tion, Dayton, Ohio, 57, 75. 
 
 Name, choice of, 118. 
 
 Net plan of premiums explained, 
 
 87,88. 
 New Hampshire, building and loan 
 
 associations of, 51. 
 New Jersey, building and loan as- 
 sociations of. 45-49. 
 New York, building and loan asso- 
 ciations of, 53. 
 laws of, act of 1887, 209. 
 laws of, act of ia r >l, 219. 
 State league of, 56. 
 New York premium plan explained, 
 93, 93. 
 
298 CO-OPERATIVE SAVINGS AND LOAN ASSOCIATIONS. 
 
 Officers, compensation of, 122, 172. 
 duties of, 124-130, 148-154. 
 election of, 147, 175. 
 names of, 122, 147. 
 suspension and removal of, 148. 
 terms of, 122, 147. 
 vacancies in, how filled, 147. 
 Ohio, building and loan associations 
 
 of, 56-58. 
 laws of, 244. 
 Orders, how drawn on treasurer, 
 
 124, 149. 
 Organization, first step in, 113, 
 
 140. 
 
 Oxford Provident Building Asso- 
 ciation, 42. 
 
 Pacific coast, building and loan as- 
 sociations of the, 67. 
 Pass-books, directions how to make, 
 290. 
 
 form of, 290. 
 
 who receipts for money in pass- 
 book, 21, 39. 
 
 Pennsylvania, brief history of asso- 
 ciations in, 42-45. 
 
 first association at Philadelphia, 
 42. 
 
 laws of, 229-236. 
 Premium, a bonus, 77. 
 
 gross plan of, 79, 80-87, 159. 
 
 high premiums work injustice be- 
 tween borrower and non-bor- 
 rower, 106-108. 
 
 installment plan of, 79, 88-91, 159. 
 
 interest premium plan, 79, 159. 
 
 manner of bidding, 23. 
 
 net plan of, 79. 
 
 New York premium plan, 23, 79, 
 101. 
 
 no premium necessary except for 
 one purpose, 79. 
 
 41 unearned " and " earned " pre- 
 miums, 85. 
 
 what is a, 77, 210. 
 
 which scheme of premiums the 
 
 best, 110. 
 President, duties of, 124, 126, 148. 
 
 Profits, "apparent profits" and 
 " actual profits," 85. 
 
 carried over undivided, 34. 
 
 distribution of, how made, 27-34, 
 166, 191-199. 
 
 dividend from, 34. 
 
 from what sources derived, 27, 104. 
 
 guarantee fund, to secure uni- 
 form dividends from, 34. 
 
 large profits indicate that free 
 shareholders are fleecing the 
 borrowing shareholder, 78. 
 
 when to be distributed, 18, 34, 166. 
 Proxy, form of, to vote at meetings, 
 287. 
 
 Real estate, when it may be pur- 
 chased, 27, 164. 
 Rebates in gross plan, explained, 
 
 82-87, 234. 
 
 Reports, annual, to bank depart- 
 ment, 217, 226. 
 by secretary, 125, 151. 
 by finance committee. See FORMS. 
 form of annual. See FORMS. 
 penalty for failing to make, 218, 
 
 229. 
 
 Rhode Island, building and loan as- 
 sociations of, 51. 
 
 Savings, cultivating the habit of 
 
 saving, 9. 
 
 means to encourage the accumu- 
 lation of, 9. 
 
 Secretary, duties of, 125-127, 150. 
 election of, 147. 
 reports by, 125, 151. 
 Security register, 206, 207. 
 Serial plan, advantages of, 72, 73. 
 Series, stock issued in, 18, 135. 
 Simplicity of scheme desirable, 
 
 100-103. 
 Southern States, building and loan 
 
 associations of the, 66, 67. 
 Stock, each share of the same value 
 
 in the same series, 1 8. 
 holding value of, 19, 199. 
 how issued and paid for, 17, 70, 71. 
 
GENERAL INDEX. 
 
 299 
 
 Stock, limit of shares to a single 
 
 stockholder, 21, 1-iG. 
 pledged or borrowed share, 21, 
 
 146. 
 
 transfer of stock, 145. 
 See FORMS. 
 
 unpledged or free shares, 21, 146. 
 withdrawal of, 19, 30, 181. 
 withdrawing value of, 19, 131. 
 Stockholder, his right to become a 
 
 borrower, 22. 
 how to become a, 17, 144. 
 limit to shares he can hold, 21, 
 
 146. 
 
 who may become a, 144. 
 Stock loan, defined, 25. 
 
 Terminating plan, 72, 74. 
 
 The Chemung Valley Mutual Loan 
 Association, 107, 180. 
 
 The Homestead Loan Association, 
 54, 75. 
 
 The People's Building and Loan As- 
 sociation, 263. 
 
 Transfer fee, 21. 
 
 Treasurer, bond of, 124, 149. 
 duties of, 121, 149. 
 election of, 147. 
 receipts given by, 21, 22, 149. 
 
 Undivided profits, 34, 198. 
 "Unearned premium," explained, 
 
 85. 
 
 Vacancies, how filled, 124. 
 
 Vermont, building and loan asso- 
 ciations of, 51. 
 
 Vice-president, duties of, 149. 
 
 Visitation by bank superintendent, 
 218. 
 
 Voting, manner of, 39, 112, 148. 
 
 Withdrawals, discussion concern- 
 ing, 131-134. 
 encouraged, when, 73. 
 how made, 168. 
 Withdrawing value, definition of, 
 
 19, 131. 
 
 Wisconsin, building and loan asso- 
 ciations of, 60, 61. 
 
 THE END. 
 
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 The Management of Infancy, Physiological and Moral. Intended 
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 CROWDED OUT O' CRO FIELD. By WILLIAM O. 
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