BUILDING SOCIETIES.

Waikato Times, Volume XXXVIII, Issue 3038, 5 January 1892, Page 2

BUILDING SOCIETIES.

I3v the suspension of building societies in the neighbouring colonies, the attention of Ujo public ha* been very forcibly directed t> the one weak part of tlieir machinery which in» vat any rune bring the whole of those institutions crashing about the eavs of their supijoriers. They are allowed to receive deposits to the extent of three times 'heir capital and of course they lend out the whole of their available funds, deposit*, capital and all, reiiorvinsr only enough for ordinary expenditure and relying, generally with eo.id reason, upon their branches for "id if thoy wish t> make new loans or repay lieno-iiti unexpectedly claimed. As they give th'iir depositors five per cent, and charge their borrowers eight—which comes to nine per cent, in reality, by ruasnu of the fact that while tha interest is only de•lucrod yearly or half yearly the payments are made every fortnight, they easily pity their shareholders teu per cent. aDd sometimes more. But they lend their money for twelve years and they receive deposits for all terms from a day to three years. CoiisiHjuently they are always in danger if a fulling i>3 iu the number of new depositors takes place, of being- brought dowu '<y tho withdrawal of the old ones. Mr Muiii'o—the Premier of Victoria— makes light of the peril, lie lian made his fortune in building society speculations. But the Legislature will have to intevf?re nevertheless and will have to increase the of capital to deposits. Yon cannot pay a depo-iti.r who wants a hundred pounds to pav his bills by handing him an unexpire-1 mortgage on eomebudy'u property due uiue