The Standard AND PEOPLE'S ADVOCATE. (PUBLISHBD EVERY WEDNESDAY AND SATURDAY.) WEDNESDAY, JUNE 16, 1875.

Poverty Bay Standard, Volume III, Issue 281, 16 June 1875, Page 2

The Standard AND PEOPLE'S ADVOCATE. (PUBLISHBD EVERY WEDNESDAY AND SATURDAY.)

WEDNESDAY, JUNE 16, 1875.

“ We shall sell to no man justice or right: We shall deny to no man justice or right: We shall defer to no man justice or right.”

The primordial requisite of all public institutions, especially those that have charge, and temporary use, of the earnings of the people, is that of unbounded confidence in the wisdom, di-<cretion, and business aptitude of their promoters and rulers. We allude more particularly now to what may be called social institutions — such as Building Societies, Saving Banks, &c., — as distinguished from political institutions, or companies formed for objects of a purely speculative ch iracter, the end of which call not be f >reshadowed with any degree of probable certainty. In the former of tlweit is a pre-condition of success, that such a liberal interpretation isput upon the laws by which they are governed, so as to attract shareholders towards them as a means for the safe custody and profitable employment of their money, always keeping in view the object for which they were formed ; w lile, on the other baud an even ba ance must be maintained, particularly in proprietary, and dividend paving institutions, that an augmentation of their capital stock is not secured by the infliction of injustice, or at the expense of individual rights. There are generally to be found, in the most carefully framed rules and regulations, some weak points which materially alter the condition of affairs in reducing theory to practice. The experience of all men who have taken an active part in the intricacies of so ial science, proves that there are times when it becomes absolutely necessary to pause and review matters ; to proceed cautiously, but adtisedly ■ and as each onward step is taken, to cait a rctro-p ctive glance, and enqui e as to future effects arising from past causes. In young branches of old institutions particularly is this necessary, because there is ever to be found in them a modicum of local leaven, which is inseparable from the condi-

tion from which they spring. Their rules, too, necessitate this, inasmuch as but little is known of their practical effect at the outset. There is too much accepted faith, and readiness to put old wine into new bottles. For the most part the rules of an existing Society are taken for granted. The fundamental clauses which contain its very life-blood are amended with the beet intention, but with little, if any, enquiry as to detail and effect; changes are made to suit local circumstances, and nothing further is known of them till tested by the light of experience.

We do not, for one moment, say that the rules of our own local Building Society did not receive every possible attention and consideration at the hands of those to whom the duty of their compilation and revision was entrusted ; but the short experience of this institution warrants us in taking up the subject of its affairs on publicgrounds, and to draw attention to the fact that some of its rules require alteration, as being opposed in their present shape, to the principles and spirit of fairness, equity, and justice. If a man subscribes for, and makes engagements on the faith of receiving, through the due performance of an obligation on his part, certain money benefits, it is but just that he should have them secured to him by an inviolable right, which, as a punctually paid-up partner, in a concern,he should be able to demand, and have the power to enforce. Now, in the Gisborne Society, the rules (if the Directors’ interpretation of them is correct, which we are far from admitting) are against the shareholder in the essential particular in which his interest is most concerned. He is induced to join a Society which fails to give him the advantages for which he pays. We illustrated some of the disadvantages in our last issue ; and we return to the subject again to-day under a sense of duty put upon us from the further facts that have been disclosed in the meantime. We showed some of the difficulties, uncertainties, and tedious, expensive, delays that besetashareholder’s attempt to get advances on his shares. We now draw- attention to the latter portion of rule 42, from which we previously quoted, referring to the payment of interest on those advances. It reads thus :—

In the event of the highest tenderer not being entitled to the whole of the disposable funds for the time being, the next highest tenderer shall be satisfied to the extent of his right, and so on until the whole sum be disposed of. The premium so offered shall in all eases be deducted from the sum to be advanced. When a shareholder receives an advance, he shall pay interest upon full amount from the day the sum is advanced at the rate of 10 per cent, per annum. Few, we think, will he found to read that rule intelligently, and say that it does not require alteration. Let us discuss the logic of it, and see how paradoxical and ambiguous it is, to say the least of it. “ The next “ highest tenderer shall be satisfied to “the extent of his right.” Right to what ? Bight to the (balance of the) £lOO, supposed to be tendered torpor right of bis interest in the Society ? If Lis right is limited to the “disposable” funds, the rule is oppressive and unjust; if it is intended to cover his whole interest in the Society, the rule should express it. Again; “when a “ shareholder receives an advance, he “ shall pay interest on full amount.” Full amount of what? Full amount of advance, or full amount of the value of his tender or, shares ? The practice of the Society is to charge a shareholder interest on the full amount tendered for by him, whether the advances have all been made or not, which seems to be a fair business-like precaution, inasmuch as his claim for the balance may be forthcoming at any moment, and the money is set aside for his purpose; but it would be infinitely more satisfactory for the rule to be explicit on the point. But in this latter instance, the former portion of our remarks will apply. It is highly desirable that such a liberal discretion should be allowed to, and exercised by, • the Directors, that a member is not subjected to captious or unnecessary delays in getting his advances. We are n >t aware of the principle upon which the Directors act in determining the value of a shareholder’s security. We assume they base their decision on the report of their valuator. But it is to be hoped they do not lose sight of the fact that a building, for whose erection the advances are made, adds a fresh value to the land on which it is built, and the title to, and value of, that land being already good, end undoubted, they can with safety lend money on it almost, if not quite, up to its full value, it being covered by a mortgage, and the subscriptions already paid by the shareholder. We are aware of, at least, one case in point in which a shareholder tendered for £lOO, and obtained it, but—although paying interest on that sum —he has been allotted £5O only until the house (which, when finished, will be worth £250) is completed I This, we need not say is diametrically opposed to the principles and spirit of Building Societies’ functions ; and, wishing the one recently started in Gisborne every success, we recommend that a solicitor’s opinion be at once taken, as to the best method of revising the rules, so as to meet equitable rights of all concerned.