Circular of Information, No. 2. Pratt Institute Thrift Association ISSUED BY PRATT INSTITUTE, BROOKLYN, N. Y. November, 1889. President: CHARLES PRATT. Advisory Council: Charles Pratt, Charles M. Pratt, ... H. A. Pratt, 26 Broadway, New York. F. B. Pratt, 232 Clinton Ave., Brooklyn. John Gibb, Hayden W. Wheeler, 274 Washington Ave., Brooklyn. Frank L. Babbott, ... Solicitors and Counselors : Carter & Ledyard, . . . S. C. T. Dodd, 26 Broadway, New York. F. B. Pratt, Manager: Pratt Institute Thrift Association. The object of the Association is to promote habits of thrift ; to help people, especially the young, to become prudent and wise in the use of money and time, by offering them a safe and simple method whereby they may make regular monthly payments for the purpose of saving money, or of accumulat- ing a fund for buying or building their own homes; also, to loan to such persons as may want to borrow for this purpose; and to do all such things as expe- rience shall prove to be essential to the accomplish- ment of these objects. The responsibility of embarking in an enterprise which has to do with the handling of other people’s money has not been assumed without much hesitation. But in the scheme of education undertaken by Pratt Institute, the value and importance of instructing the young in this subject of thrift leads us to do all we can to encourage them in habits of saving. Ex- perience has demonstrated that there must be some motive to impel persons to save money with regular- ity ; therefore our effort will be to encourage them to save their first dollar, and then to help them to make the one dollar, ten, then the ten, one hundred, and so on, by offering them a safe place for the deposit of their savings, at a liberal rate of interest. 4 Pratt Institute Thrift Association . One says : “ If I receive $500 per year, how much can I save ? ” We cannot answer. It is wise to provide something for the contingency of sickness and loss of employment which may make you a non- producer. Every honest man is bound to live within his income. Another says : “ If I receive only $4 or $5 per week, how much can I save ? ” Save ten, twenty-five, or fifty cents a week, but save something. The amount is of less importance than that you put a part of your earnings aside, at regular intervals. The first one hundred dollars earned and saved has started many a mechanic and merchant on the road to wealth. Therefore, begin to save to-day, and never stop until you are obliged to. Your money will be safe if deposited with “ The Thrift,” and the habit of self-denial will be formed. The boy who learned to save 50 cents per week while he was get- ting $5, can easily save $3 per week when he gets $10, or $7 per week when he gets $20; but it will not be so easy for a man who has been spending his full income of $20 per week to reduce his expenses to $13 per week. Estimate your wealth not by the number of dollars you have in bank, but by your power to live a con- tented life on some sum less than your income. If your wants are simple, you will find it easier to supply them. It is right for one to increase his expenses to a degree consistent with his increase of income. Consequently, be just to yourself and to your family, and “ Neither a spendthrift nor a miser be.” “ The Thrift ” is designed to aid in the work carried on at Pratt Institute, but it is not con- ducted by the Institute, nor is the Institute in any way responsible for it. The names of persons finan- cially responsible for “ The Thrift ” will be furnished to those doing business with it, on request. Pratt Institute Thrift Association . 5 BENEFITS. 1. Any person, whether connected with Pratt Institute or not, is entitled to the benefits of the Association upon complying with the regulations, with the understanding, however, that the manage- ment at any time will have full power to close an account without giving notice or reason, by refunding the money with interest. 2. The work of the Association divides itself into two branches, the “ Investment Branch,” and the “ Loan Branch.” INVESTMENT BRANCH. 3. The first practical step must be to afford opportunities for persons to save and deposit their money, and we wish to offer the best possible induce- ments consistent with safety, to secure method and regularity in the manner of saving. The intention is to allow small deposits, so that no one need be debarred from sharing in this plan. 4. The Investing Shares of the Association, to which no liability attaches, are $150.00, payable at the rate of $1 per month for ten years. The monthly payments on each share amount in ten years to $120.00, and the accumulated interest at the rate of 5 per cent, per annum to $30, making $150 in all; in addition to which, provided the installments are regularly paid, each share at the end of the ten years will be entitled to a premium of $10 per share more. In other words, a monthly payment of $1 will amount, with interest and premium, to $160 at the end of ten years, or about 6 per cent, per annum on the subscription paid to the Association. 6 Pratt Institute Thrift Association . 5. Payments draw interest from the first day of the month following the date of deposit. Payments may be made in advance from time to time, or the number of shares may be increased if desired. A fine of two cents a share per month will be charged on overdue payments. 6. Application for investment must be made on a blank form furnished by the Association. The in- vestment fee is fifty cents, payable with the applica- tion. 7. It is not intended to offer a high rate of interest so as to induce the deposit here of funds already invested in savings banks or elsewhere, but rather to encourage, in young and old, the habit of regular, systematic economy and saving in small amounts. 8. $150.00 in one sum pays up a share in full, and when this payment has been made the interest is payable half-yearly, at the rate of 4 per cent, per annum, the holder being entitled, at the end of ten years, to the same premium as that receivable by persons who pay for their shares by installments. 9. Shares can be withdrawn at any time; and although the Association may, under its rules, require one month’s notice, it hopes to be able to repay sub- scriptions on demand, and without notice. No inter- est will, however, be allowed on shares payable by installments if they be withdrawn within two years of their issue. 10. Shares may be held by minors, and by trustees and guardians on behalf of others; and by married women in their own names, and for their separate use, and they may sign receipts for interest and principal. Pratt Institute Thrift Association . 7 TABLE SHOWING HOW MONEY MAY BE ACCUMULATED. ii. One share at $1.00 per month, involving a saving of 4c. per day for 300 days, amounts, with interest and premium, at the end of ten years, to $160.00. 1 Share at $1.00 per month, about 4 cts. a day, to $ 160.00 2 Shares “ 2.00 ii " 8 a ft 320.00 3 ‘ “ 3.00 > t “ 12 « tt “ 480.00 4 “ “ 4.00 ft “ 16 “ “ 640.00 5 « “ 5.00 “ “ 20 a tt « 800.00 6 “ “ 6.00 “ « 24 ii 960.00 7 “ “ 7.00 “ “ 28 “ “ “ ... . 1,120.00 8 “ “ 8.00 ti “ 32 et ii 1,280.00 9 " “ 9.00 tt “ 36 “ ii 1,440.00 10 “ “ 10.00 “ “ 40 et ii 1,600.00 11 “ “11.00 “ “ 44 tt ii 1,760.00 12 “ “ 12.00 “ “ 48 “ “ “ 1,920.00 13 " ‘ 13.00 «■ “ 52 it ft a 2,080.00 14 “ “ 14.00 “ “ 56 “ ti “ 2,240.00 15 “ “ 15.00 “ “ 60 “ <- “ 2,400.00 16 “ “ 16.00 “ “ 64 tt “ 2,560.00 17 “ “ 17.00 “ “ 68 “ ii 2,720.00 18 « “ 18.00 “ “ 72 “ « a 2,880.00 19 “ “ 19.00 “ “ 76 ii 3,040.00 20 “ “ 20.00 “ 80 “ 3,200.00 By steady perseverance in saving, therefore, every person, however limited his income, may make some provision for the future, by investing in “ The Thrift.” In addition to this, that which we estimate to be of more value than the money, is the growth of character which is developed by the self-denial and personal sacrifice required in making this saving. 12. The foregoing explains the manner of saving money by deposits in the “ Investment Branch.” Now the question is, How can we use this money safely so as to produce a rate of interest that will be encouraging to those who save it ? It is proposed to loan it to persons for the purchase of homes, and 8 Pratt Institute Thrift Association . to have the loans so made that they can be paid in small monthly installments in place of rent, so that after a term of years the home will belong to the member taking the loan. This part of the enterprise will be termed the LOAN BRANCH. 13. Sums of any amount will be loaned for the purchase of private houses, shops, and other real property in Brooklyn, but it is the special object of the Association to encourage the purchase of dwell- ing-houses by persons for their own occupation; and all applications for advances, with this object in view, will be dealt with in the most liberal manner consist- ent with security. 14. The Association will not purchase or build houses, but simply make advances for this purpose. The amount which will be advanced will be regulated according to the valuation of the property by the Association’s officials; and of this value, a tenth part at least must be provided in advance by the one wishing to obtain a loan. 15. In order to cover the cost of doing the busi- ness, — such as general office expenses, searching records, guaranteeing titles, &c., and to keep the rate of interest low, as well as to establish a perman- ent security fund, a commission of 1 per cent, per annum on the sum advanced will be charged, which sum, if desired, can be added to the loan. This is based on the experience of the best English societies, though we shall modify these charges from time to time as our own experience shall justify. 16. The option will always remain with the borrower to pay the loan in full, at any time, if he shall prefer to do so. Pratt Institute Thrift Association . 9 17. Loans will be re-payable by monthly install- ments, commencing on the first day of the month following the date of the mortgage, or in any other manner that may be arranged, so that the re-pay- ments shall not extend over twenty-one years. 18. The monthly installments are to totally ex- tinguish principal and interest; and when they are all paid the house will become the property of the borrower. 19. So long as the installments are paid regularly r the loan cannot be disturbed; but the borrower can at any time make additional payments on account of the advance, and thus either shorten the period during which the installments are payable, or reduce their future amount ; or the mortgage may be canceled at any time by paying the present value of the future installments. Table showing the monthly payments required, cost of LOAN, &. C ., FOR A LOAN OF $ 1 , 000 . 00 , FOR A PERIOD OF TEN YEARS. Monthly dues, Total dues, 10 years, All other charges $10 per year. Total cost for 10 years, Amount borrowed, Actual cost of loan, ./. “ “ “ per year, .. “ “ “ percent... Interest on Loan at 5 % s^% 6 % > 10.90 $ 11.10 $ 11.40 1,308.00 1,332.00 1,368.00 100.00 100.00 100.00 1,408.00 1,432.00 1,468.00 1,000.00 1,000.00 1,000.00 408.00 432.00 468.00 40.80 43.20 46.80 4 A 6 20. As an illustration of the working of “ The Thrift,” the case may be taken of a person occupying a house in Brooklyn, for which he pays a rental of $300 per year. The price is $3,000, of which amount he pays, perhaps $400, and obtains $2,600 from u The IO Pratt Institute Thrift Association . Thrift.” If the advance be granted for fourteen years at 6 per cent, interest, the payments to the Association will be about $30 per month, or about $360 per year, inclusive of city, county, and water taxes, insurance, and commission. By selecting a longer period for the redemption of the advance these payments can be reduced. At the end of fourteen years, if the installments be regularly paid, he becomes the abso- lute owner of the house, while as a tenant he would have paid his landlord during the same period almost the same amount of money without becoming the owner of a single brick. 21. In the event of borrowers, from adverse cir- cumstances, being unable to keep up their subscrip- tions, the Association has power, after three years 7 installments have been paid, to suspend, without fines, all further payments for twelve months. 22. Through the aid of the Association, therefore, any person may become the owner of the dwelling house he occupies as a tenant, by an annual payment, for a limited period, very little in excess of the regular rent. 23. How to obtain an advance. — The first step to be taken, after a person has selected a house, and ascertained the price, is to obtain from the office a Form of Proposal, which must be filled out according to the instructions contained therein. The property is then examined, and a report made to the Managers, by whom the amount which can be wisely advanced is determined. 24. As every application for an advance is con- sidered on its own merits, it is impossible to state the amount which will be loaned, or to fix the rate of interest, until the property has been inspected by the Association’s official ; but in all cases, applicants will be dealt with on the most liberal terms consistent with security. Pratt Institute Thrift Association . 1 1 25. The firm of Charles Pratt & Co. have executed a bond in the sum of $500,000 to indemnify and protect all persons having financial relations with the Association. 26. Rules for the conduct of the business will be adopted and modified from time to time as experience suggests. The office of the Association will be open on Monday, Wednesday, and Friday from 2:00 to 4:00, and from 7:30 to 9:30 p. m., and at such other times as may be determined. Additional information will be furnished by mail or upon application at the office. Address: “ The ThriktV’ Pratt Institute, BROOKLYN, N. Y. 215 Ryerson Street. Ill 2 1 05924218