Many of the associations issue two kinds of shares: the regular instalment shares and the full-paid or saving shares. The latter are not accounted as membership shares. Their owners have no vote in .the conduct of the association, and interest is paid at a fixed rate, generally working out at an average of 20 per cent less than the profits of the regular share holder.
Since 1912 several of the States have passed °Rural Credits° laws, authorizing Building and Loan associations in such States to make long time (up to 20 years) loans to farmers on mort gage notes based on farm property. These °rural credit° shares are figured to pay 5 per cent clear to the lending members and are charged to the farmer at about 6% per cent interest.
The plan appeals to the wage worker, be cause of the easy payments. It appeals to small lenders, because it affords them a sort of sav ings bank and encourages systematic savings. Small tradesmen and merchants are almost as apt to become interested in such associations as are those who work for a weekly wage, and the economical methods by which a large amount of money is borrowed and loaned safely have attracted many to the associations as being a safe depository, and likely to pay 6 or even 7 per cent dividends.
Originally, these associations were usually confined to a town or locality, no loans being made beyond the territory where most of the members lived and knew the value of the prop erty. But within recent years both State and national associations have been organized, which do business anywhere within the limits of their larger territory. It is a significant fact, however, that many of these larger associations have come to grief, and at their best their profits have been much smaller than those of the local associations, their expenses being very much larger proportionally for the sums handled.
The management of an association is usually lodged in a board of directors elected annually from the shareholders, and whose members serve without pay. They pass upon the loans, and having investments of their own to pro tect, closely guard the association treasury. The secretary is customarily the only salaried officer, and is often paid for doing the detail work by a system of small fees. Sometimes the fines levied on delinquents are his sole compensation.
Each association makes minor laws of its own, and many vary the plan as above given in numerous details; but the general principles here outlined are the same with all.
In 1916 there were in the United States, as reported at the annual meeting of the League of Building and Loan Associations, 6,806 of the local associations, most of them being in Penn sylvania, where they number 1,820; New Jer sey following in order with 742, and Ohio with 657. The total membership reported was 3,334, 899, an increase in the year of 230,964. Among the States Ohio was credited with having the largest list of members, numbering 649,126. The aggregate assets of all the associations was $1,484,295,875, an increase in the year of $126, 497,975, and an average of $445.05 per member. In the ten years (since 1906) the membership had nearly doubled and the assets more than doubled. The aggregate expense of manage ment for all the associations for the year was $8,640,152, a little less than nine-tenths of 1 per cent of the year's receipts. See CO-OPERATIVE