BUILDING AND LOAN ASSOCIA TIONS, combinations of individuals, who agree to pay a fixed sum monthly, by which a fund is accumulated which is loaned to members who desire to pur chase or improve real estate. Their cap ital stock, which is prospective, is usu ally divided into shares of a par value of $200 each. Each shareholder pays upon each share he holds a monthly subscrip tion of $1, till such payments, with ac trued profits, bring the value of the share to par. The number of shares each member may hold varies in different as sociations, the general rule being not less than two nor more than 25, the latter limitation being intended to prevent speculation. Building and loan associa tions are formed on two plans, called ter minal and serial. The terminal associa tions compel all members to begin pay ments on the same day. A new member joining after the beginning of the as sociation is thus forced to pay arrear ages. This is avoided in serial associa tions by allowing new members to join at stated intervals, usually six months or a year, without the payment of arrear ages. The advantages of building and
loan associations are: That each share, whether borrowed upon or not, has cred ited to it a pro rata amount of all profits declared. Loans are generally advanced to within 80 per cent. of the appraised value of the property. No large salaries are paid. All officers, appraisers, au ditors, etc., are elected in open meeting. Members may withdraw at any time after the first year, obtaining a fair share of the profits. Loans are invari ably secured by first mortgage. Only members may obtain loans. Mortgages may be paid off at any time. There are no speculative features, the association buys nothing, the borrowing member making all contracts. In 1918 there were 7,484 building and loan associations in the United States, reporting 4,011,401 shareholders. These associations had as sets aggregating $1,898,344,346. The total receipts and disbursements balanced at $1,325,313,352.