BUILDING AND LOAN ASSOCIA

TIONS, co - operative organizations which have as their object the building of homes for their members through cooperation in financial a istance. They are distinctively of American origin, the first society of this kind being formed in Philadelphia, Pa., in 1831, known as the Oxford Provident Building A ociation. It was not till after the Civil War, when the settlement of the Middle West began in earnest, however, that the a ociations took on a@ vigorous life as an institution, esecially in the cities of St. Paul and inneapolis, where whole areas of the residential portions of the communities were built on this plan. The scheme is a@ primitive form of consumers’ cooperation. A local club is formed, each member buying one or more shares, for which he pays on the installment plan. When enough money has been accumulated in the treasury for building a house, it is auctioned off as a loan to the members, the highest bidder obtaining it, the premium going to the organization’s treasury. The money is not usually given over the borrower, however, but, on his behalf, the society makes arrangements with the building contractor and pays him as the building roceeds, holding a mortgage on the ouse until the debt has later been repaid. Membership is open continuously to all comers of good character, so that the shares always remain at par, as in any consumers’ co-operative society. The advantage of the building and loan a ociation over a bank is that the members are well acquainted with each other and in position to judge a borrower’s integrity better than a bank official, and thus moral character counts for quite as much as financial standing. Within recent years, and especially in Ma achusetts, these a ociations have extended their operations further, becoming general credit unions, lending members’ money for other purposes than; - building homes. It is therefore difficult if to draw the line between a building and: om loan a ociation and a credit union, especially as the laws which are pa ed for their incorporation usually cover the credit union aspect as well, giving the societies a wider range. This American plan was widely imitated in Europe, but more especially in England, where it was considerably developed, the famous ‘garden cities’ being the result. Abroad, however, title to the houses built usually remains in the hands of the society as a whole, the houses being rented to the members at cost price. There has been a vigorous growth of the institution in this country, especially during the recent years of high prices for building and building materials. The societies continue to remain local in character, and efforts at federation remain weak. The United States League of Building and Loan A ociations was founded in Cincinnati, in 1892, but only 260 delegates attended its convention in 1922, whereas there are about 10,000 local a ociations in the country, with total a ets of over $2,000,000,000. In England federation has been more succe ful, with the results that the central organization is able to manufacture and import building materials and maintains a staff of first cla architects, all of which further reduces expenses,