"Practically most of the best societies discharge the functions of land mortgage banks. On the one hand they receive money in such a variety of ways as to meet the requirements of all classes of investors, and at a rate of interest higher than the ordinary savings banks ; on the other hand they lend money out on mortgages, sometimes obtaining a higher rate of interest, it is true, than ordinary mortgages, but granting facilities for repayment which private mortgages could not afford.
"The great difference between permanent and terminating societies consists in this, that whereas in the latter a person must either become a member at the time the society is established, or else pay a large amount of back sub scriptions, in the former he may become a member at any time, without making any such payment. Again, the former class offers many advantages to both investing and borrowing members, which a terminating society cannot offer. In a permanent society, the investors can always ascertain the exact length of time during which they will have to pay their subscriptions ; and it is always comparatively easy to ascertain the amount to which any invest ing member, who may wish to withdraw, is entitled ; whilst in a terminating societ_y the members will be unable to calculate with any degree of certainty how long the society will exist, and, consequently, how long they will be required to subscribe, and it will be absolutely necessary to impose fines on L'iose members who do not pay their contributions regularly. But it is to the borrowing member that the permanent system holds out the greatest inducements, for it enables him to extend his repayments over any fixed number of years, at his own choice ; and to feel, when he mortgages it, that he can redeem it at any time, on payment of a sum easily calculated. The objection which exists in terminating societies to allow the borrowers to share in the profits does not apply to permanent societies, and the borrowers often share the surplus funds equally with the investors." Statutory Building Societies Acts apply to Scotland and Ireland as well as England, but they do not apply to the Isle of Man or to the Channel Islands. Before a building society may commence business it must be registered by the registrar of friendly societies and obtain a certificate of incorporation. At the same time it will be required to draw up and settle its rules, which must be approved and certified by the registrar. These rules
usually follow a common form, and contain all regulations as to the management of the society and its powers, and the powers of its officers. They are too volu minous to set out here, but a few items may be noticed. They must set forth the name and chief office of the society ; the manner in which its funds are to be raised ; the terms of issue of unadvanced subscription shares ; the manner of payment and withdrawal of contributions, together with certain tables of principal and interest ; the terms of payment and withdrawal of paid-up shares ; the conditions upon which advances are made ; the terms for re demption of mortgages ; the manner in which losses are to be ascertained and provided for ; the manner in which membership is to cease:, how the funds of the society are to be applied and invested ; how the rules may be altered or added to ; whether the society is terminating or permanent ; and when and how it may be dissolved. In addition to this they must regulate the appointment of officers ; the calling of and procedure at meetings ; the audits and the custody of and manner of using the seal ; and the settlement of disputes by reference or arbitration. The rules constitute a contract be tween, and binding upon, the society and its members. The law is explicit in many matters without regard to the rules. Thus the directors will be treated as trustees in respect of any money of the society which comes into their hands, or is under their control. The liability of a member on a share upon which no advance has been made is limited to the amount actually paid or in arrear ; on a share upon which an advance has been made, to the amount payable thereon under any mortgage or other security, or as the rules may provide. Ten members, of not less than twelve months' standing each, may require an inspection and report on the books of the society by an accountant or actuary. An inspector may be appointed to inquire into the affairs of the society, or a special meeting of the society may be called upon the requisition of one-tenth of the members, or of one hundred members in case the society consists of more than one thousand. The next-of-kin of an intestate member or depositor may withdraw the amount due to the deceased, up to 1'50, without letters of administration.