BUILDING AND LOAN ASSOCIATIONS 229 



The first rock which the buildinf^; and loan association 

 struck hard in its evolution was that condition when no mem- 

 ber of the association desired to borrow any more money. 

 His shares had matured, releasing his loans and obligations. 

 There was no provision for loaning funds to any one but a 

 member. The dues collected, and there were no takers com- 

 ing forward with premiums or drawing schemes by lot. Out 

 of the anomalous condition the forced loan was suggested. 

 By the same lot drawing, somel)ody who didn't want the money 

 was stuck with it for a loan period, whether he would or not. 

 The result of this unexpected expedient led to another solution 

 of the general difhculty. 



Much of this trouble had come about through the ruhng 

 that the man coming into an association after its organization 

 was required to pay all back dues upon the original first issue 

 of shares. If only a month had intervened the difference was 

 slight. If it were a year or tw^o years, the back dues were 

 great enough to be almost wholly prohibitive. 



The first plan evolved for the perpetuity of the association 

 provided for the issuance of a new share series w^henever occa- 

 sion required. On this issue the new member paid just as the 

 member in the first series paid, after his entry taking his pro- 

 portionate earnings of the combination accordingly as his 

 money had been used. Members were encouraged to withdraw 

 shares near to maturity. The holding of free shares — shares 

 not loaned upon — was less encouraged. As a result, the aver- 

 age life of any one series was fixed at four years by these con- 

 ditions. This serial plan virtually is the plan of the building 

 and loan association of to-day, unless in individual communi- 

 ties where it is the aim and wish of members that the termina- 

 ting association is all that is needed. 



Not a Httle ingenuity has been expended in the many 

 plans for choosing the preferred claimant for a building loan. 

 As one of almost 100 methods the following is typical : 



A man has taken five shares in the association at $200 

 each. He needs the $1,000 that is on hand, and, especially as 

 any premium he pays for the privilege goes into the general 

 profit fmid of the association, he feels disposed to bid sharply 

 with any possible competitor for the privilege. And he does. 



