Manawatu Herald. TUESDAY, SEPT. 16, 1902. Building Societies.

Manawatu Herald, 16 September 1902, Page 2

Manawatu Herald. TUESDAY, SEPT. 16, 1902. Building Societies.

We would like to draw the attention of those interested in the progress of the town and district to what appears a want, to supply which our wealthy and thrifty settlers should pay attention to. It is well-known that the colony as a whole, aa well as particular districts, have flourished from the right use made of borrowed money. To-day the colony is intersected with railways, the coat of which has never been paid, and perhaps never will be, because the lender of the money would rather be receiving the interest upon the loan than its repayment. Borrowers and lenders represent a most necessary division of labour, as the lender of to-day was possibly the borrower of yesterday. The lender represents the lucky person who has laboured so well that the time has arrived when he can cease from his labour, if, a most important if to him, he can And some one who will pay him so much a year for the use of his surplus money. If he can, and the security offered is safe, the lender can “sit on a rail and watch his beeves grow fat ” as a lawyer once pictured the whole business of a farmer to be, for he can do better than that for he can smoke his pipe and watch others toiling away instead of himself. Every man has got to earn his living by the sweat of his brow, we are told, and certainly when young he has to. The young man is generally well handicapped, and to heap up riches he has to be wonderfully careful of the first dollar*.

Every expanse must be minimised, and experience has shown us the industrious man becomes in time possessed of wealth which would be a trouble to him was there not a way in safely lending other people the money to tfork with. Wo thus admit that there are always two,classes amongst us, those who have the money to spare, and those who want the loan of same. The borrower need not be thought an idle or reckless person, for to many he is a most useful one, as he helps the lender and himself by utilising the money. The difficulty confronting both parties is the safe lending and the safe borrowing. For this there are many schemes devised, but one of the most popular ways is that on the principles set out in building societies. In a colony it is the desire of every man to be his own landlord He has, we will say, a little money, £SO or so, and desires to purchase a building site on which to erect a homo. He finds that the money is in no way sufficient for the purpose and another £2OO is wanted. He may, and many do, argue, that no one is so foolish as to lend him £2OO on a £SO security and gives up the idea of being a householder. The building society is just what he wants, as the directors would" lend him the £2OO necessary, if he secures to them as security the whole property, which would, when the house is finished be £250 and not £SO. The interest he would have to pay would depend on the borrower, whether ha desired to pay the amount in five, ten, or twenty years. Anyhow’the interest, on a ban for a reasonable period, in ,addition to the amount payable monthly to redeem the loan, would not be more than an ordinary rent, and at the end of the period the man would have a freehold property. This position to any man must be far preferable to the plan of continually paying rent.

Under these circumstances we may agree that a town is better by having a Building Society, managed by men who thoroughly know the district, the values, and the. borrowers. We are happily situated hero in having both lenders and borrowers, and if more capital was needed than could be raised by the investors shares, the fact that local men had investments in it and management of it, would lead to any more being easily obtained from outside. There are two or move ways of having a building” society, a permanent or terminating one, which would be a matter of detail for the promoters, if the suggestion catches on. Building Societies have stood ’the test of time, having first come into notice in the year 1886. We know, from personal knowledge, what value these societies have been to Wellington, Palmerston and Feilding, and feel sure that one in operation here would be bound to be a success. ,