ANOTHER BUILDING SOCIETY

Poverty Bay Standard, Volume I, Issue 98, 3 April 1884, Page 2

ANOTHER BUILDING SOCIETY

Notwithstanding the oft reiterated assertion with regard to the tightness of the money market, and the gloomy forebodings of those who take a dispairing view of the future, it is gratifying to see the push and enterprise which is being manifested in many directions in this district by those who have faith in its resources. It has been our pleasing duty of late to foster the infant growth of a local Gas Company and a Cheese and Bacon Factory Company ; to record the efforts bring made to obtain the construction of harbor works, and a railway to the Patutahi Quarry; and to note the many buildings and other improvements which are going on in our midst. The last addition to our local institutions is the Cook County Building Society (Permanent), a copy of the rules of which is now before us. Although there is al read}’ a kindred society—the Gisborne Permanent Building Society—in existence, which has done very good work during the past nine or ten years, a number of gentlemen, considering that there is ample scope for further operations in this direction, have resolved to start the new venture. We are assured that its interests are not intended to clash with those of the old society but that, by drawing capital from sources not available to the latter, it will assist to a greater extent in furthering the objects for which Building Societies are established. The rules of the new society are certified by the Revising Barrister as being in conformity with law. The Registrar of Building Societies also certifies that the society is incorporated under the Act of 1880, so that all legal formalities have been complied with and the interests of members properly secured. The rules provide for the issue of paid-up shares of £5 each payable in one sum, and of subscription shares of the ultimate value of £25 each [payable by monthly contributions of

four shillings; and impower the society to take up money ou interest, repayable either at call or at fixed periods, whetlier on debentures or Post Office Savings Bank principles or otherwise. A choice of different modes of investment is thus open to all classes whether they have much or little to put aside in safe custody. The stock thus raised will be lent to members to assist them, for it must be manifest that to be properly secured against any possible loss the society cannot advance the whole of the money required, in purchasing freehold properties or in erecting buildings; or, should they already possess a property, they can borrow money on it, to be repaid by moderate monthly contributions. Interest is to be allowed on investment shares at the rate of 8 per cent, per annum. The further profits of each year, for it is contemplated that a mimimum of at least 10 per cent, will be annually divisable, are, after setting aside one-fourth as a reserve fund, to be equitably divided among investors. Holders of paid-up shares will receive their dividends annually, while those who subscribe by monthly contributions will have their profits placed to their credit and carried forward at compound interest. Table A. indicates the value of one share with interest added monthly after the first year, and is well worth the study of those interested. Thus in seven years and eight months, the aggregate amount of £lB Bs. paid in by monthly subscriptions of four shillings and compounded at 8 per cent, interest become worth £25; but, with the profits in addition to this interest, the shares would reach their ultimate value in less than the time mentioned. Any shareholder can see by this table the actual value of his shares, should he desire to withdraw them any time within three years of taking them up; after that period the surplus profits become permanently added. This is an encouragement to members to continue to hold on to their shares, rather than to withdraw as soon as they have accumulated a little fund. All subscriptions and fines cease after the subscription night following the receipt of a notice of withdrawal, and no fees are to be charged. Borrowing shares are also fixed at £25 each. Applications for advances are to Be considered in the order in which they are received ; but when there are several applications for loans, investing members are to have the preference over those who have merely applied for borrowing shares. The moral of this is that all intending borrowers should at once take subscription shares. In the event of old members of the society applying for more money than the directors have at their disposal, a ballot is to take place, the successful applicants obtaining the advances they require, while the unsuccessful ones are to have precedence of any subsequent applicants. This we take to be a very wise provision, as it will enable those members who desire to obtain advances to calculate their chances with some degree of certainty. Loans are to be granted for any period from one to twelve years at the option of the borrower, the tables on page 26 of the Rules showing the scale of monthly repayments of principal and interest included, extending over the whole period. One very gratifying item in the Rules, and which is calculated to make the new society popular, is the exceptionally low scale of charges to be paid by borrowers to the solicitor for preparing the mortgages. The survey fees are also fixed on a sliding scale that the borrower of a small amount may pay a proportionately smaller amount than his wealthier neighbor. The Board of Directors comprises the names of some of our most prominent fellow citizens, whose connection with the new society affords proof of the genuiness of its purposes, and promises well for its stability, while it encourages the hope that its operations will be conducted on the soundest financial principles to the profit and advantage of all concerned. The rules further provide for the periodical audit of the books, for the custody of the deeds, and for all other matters requisite alike for the due protection of the interests of members, depositors, and the Society. They seem to have been most carefully considered by their framers, but it is impossible to give more than the barest outline in the space at our command. We can only recommend their perusal to all who are interested, and heartily wish the promoters of the Cook County Building Society that success which their endeavours to foster the best interests of the district deserve.