HEATHCOTE BUILDING SOCIETY.

Lyttelton Times, Volume I, Issue 27, 12 July 1851, Page 6

HEATHCOTE BUILDING SOCIETY.

One or two notices have appeared in our columns lately, with reference to a society projected under the above name. The society itself is at present only in embryo, its constitution, rules, &c, being in course of formation, and its projectors appear, as far as we can discern, to be working upon these deliberately and cautiously. In good time the prospectus will doubtless be issued, and the schenie'become open to the approval or otherwise of those classes for whose benefit it is designed. We shall forbear, therefore, for the present, to express any opinion upon this individual society ; but are chiefly anxious, in this article, to shew the principles upon which, to be as useful as they may possibly be, such institutions must be based, and the errors to be avoided in their formation. This purpose was partly answered by an extract from the Family Economist which appeared in our paper of the 17th May. We cannot, however, either say too much in favour of really good and well-managed instances, or delineate too minutely the various methods employed.

The broad fundamental principle of Building Societies clearly is, to enable the non-capitalist, who cannot purchase for himself a dwelling'offhand, to. employ the sum he is accustomed to pay as vent, in gradual accumulation of the required sum, for his own benefit, instead of alienating that sum from himself by the payment of rent to another. In this way he becomes in a certain time the owner of house or other real property, which would, in the ordinary course of things, have become no more his own than it was when he first entered upon it. On the one hand, he would have been year by year

enriching another, on the other, he has been paying an amount of rent to his own creditj which by and bye accumulates to a sufficient sum to make him sole owner of his homestead, or his farm, as the case may be.

This principle is manifestly far superior to that of Savings Banks. In the long run, it gives the working man, (for it is his class that chiefly avails itself of Building Societies) a rate of interest for his savings equal to 6 or 8 per ;>c&nt, or the average return of money invested /in real property, while the highest rate which usavings banks can afford to give, is 21 per cent. T£he reason of the difference is, simply, because one go-between or medium party is omitted in the transaction, viz., the landlord ; or rather because the two interests of landlord and tenant are made to meet in one and the same person.

The object of these, societies is also to raise the condition of the working, man in amoral, and a political point of view. There can be no doubt that an indirect moral influence is exercised by them of no trifling nature. Apart from the patience and perseverance that are necessarily called into action, the possession of a house or a garden at the end of a fixed term will give the working man a status in his circle of society, that has the most beneficial tendency, increasing his self-respect, and inciting him to propriety of conduct by this, if by no better motive. The "Allotment System," prevalent in some parts of England, and pronounced by a dignitary of our Church to be "a system of unmixed good," acts in much the same manner upon the minds of individuals. Time is employed also, in those humble additions and decorations which a man will with assiduity make to his own property ; time which would otherwise have been spent in far less consistent and beneficial enjoyments. Not only so, but, in the old country, the possession of a freehold confers certain political privileges upon the labourer, which are seldom enjoyed by those of his class who occupy the houses of others. He obtains the right of making his voice heard, when the representative of his interests and welfare in the senate of his country is to be elected. At present, no such advantage would be conferred by the acquisition of property in New Zealand, but the time will come when these remarks will apply equally to colonial representative institutions as to those of the mother country.

Some will perhaps consider this anything hut a benefit to the community at large, by placing the right of suffrage in the hands of those who are unable to use it as it should be used. But we think that those who to obtain this among other advantages, have practised a course of frugality and self denial, are surely worthy of it.

Enough as to the advantages of Building Societies, let us now look for a moment at their mechanism.

The most useful association to the working man, in the end, is that which partakes most of a mutual character. This is evident. The body of men who club together and form a Building Society with their own savings, will eventually gain more by the method than they would do, were they to join an association that bears more the stamp of a Loan Society, where the money of other men is to be employed, and consequently to be paid for. The latter is only most useful to those whose want of money is pressing and immediate—the former answers best the purpose of the sober, steady, though poor man^ who is anxious to realise the motto "slow, but sure" and to make a real, not a merely apparent progress. In the article before referred to, quoted in

>-. our former number, a'simple arithmetic sum was <«given, by which it appeared that the purchase, in the space of ten years, of property to the amount of £200., need only cost the owner, over and above the sum paid in lieu of rent during those ten years,.a further sum of about £3. 125., being the individual share of the ne-

cessary expenses of the society. In a prospectus we have lately seen of a Colonial Building Society, the amount to be paid eventually for the present loan of £10 would be about £165. *m a sum of £55 forinterest and expenses. In Jjris society, the advance would be granted on application—hence the expense—while in the one previously referred to, the advances are made as the members' subscriptions amount to the required sum, priority of advance being decided by lot. Both Societies occupy ten

years in the working. Even the expensive but ready one is infinitely better than the payment of rent to a landlord— its advantages are great, but we submit that the steady patient pursuit

of the benefits held out by a Bowkett Society, as they are termed, in which the monthly payments bear a fair proportion to the sum advanced, would be a wiser course for the humble labourer, than to encumber himself with heavy periodical payments, made up of principal and interest, which he may not be able to meet without difficulty. Especially is this argument valid in such a country as this, where the working man can build, his own hut, and " rough it" out, until by industry and frugality he accomplishes his object, and obtains a comfortable habitation, combined with perfect independence of rent and landlords.