REPORT OF THE COMMISSION OF INQUIRY INTO THE LAWS RELATING TO BUILDING AND LAND SOCIETIES.

Appendix to the Journals of the House of Representatives, 1870 Session I, D-45

D.—No. 45.

REPORT OF THE COMMISSION OF INQUIRY INTO THE LAWS RELATING TO BUILDING AND LAND SOCIETIES.

PRESENTED TO BOTH HOUSES OE THE GENERAL ASSEMBLY, BY COMMAND OE HIS EXCELLENCY. WELLINGTON. 1870.

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COMMISSIONS. G-. E. Bowen, Governor. To Oswald Curtis, Esquire, Superintendent of the Province of Kelson; Nathaniel Edwards, Esquire, a Member of the House of Eepresentatives ; William Hunter Reynolds, Esquire, a Member of the House of Eepresentatives; Henry Howorth, Esquire, a Member of the House of Eepresentatives ; George Maurice O'Eorke, Esquire, a Member of the House of Eepresentatives ; Edward Cephas John Stevens, Esquire, a Member of the House of Eepresentatives; and Jonas Woodward, Esquire, Beceiver-General. Whereas it is expedient to make inquiry into the Laws relating to Building and Land Societies and the operation thereof, and I have thought fit, by and with the advice and consent of the Executive Council of the Colony of New Zealand, to appoint you to be Commissioners to make such inquiry: Wow know yo that I, Sir George Eerguson Bowen, G.C.M.G, reposing special trust in your knowledge and ability, have thought fit, by and with the advice and consent of the Executive Council, to constitute and appoint, and by these Presents, by and with such advice and consent, do constitute and appoint you Oswald Curtis, Nathaniel Edwaeds, William Huntee Eeynolds, Heney Howohth, Geoege Matjbice O'Eoeke, Edwaed Cephas John Steyens, and Jonas Woodwaed, to be Commissioners to investigate and report upon the Laws relating to Building and Land Societies, the operation of such Laws, and the working of such Societies, and to make such suggestions in connection therewith as to you may seem fit: And I do, by these presents, by and with the advice" and consent aforesaid, grant to you, or any two of you, full power and authority to carry into effect the purposes of this Commission by all lawful ways and means whatever: And I do, by these presents, ordain that this Commission shall continue in full force and virtue; and that 3 rou, the said Commissioners, or any two of you, shall and may, from time to time, and at any place, proceed in the execution thereof, although the same be not continued from time to time by adjournment: And Ido further will and direct that you do, within six months after the date of this Commission, or as much sooner as the same can be done (using all diligence), certify to me, under your hands and seals, or under the hands and seals of any three of you, your several proceedings and your opinion touching the premises. Given under the hand of His Excellency Sir George Eerguson Bowen, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Governor and Commander-in-Chief in and over the said Colony of New Zealand and its Dependencies, and Vice-Admiral of the same, at the Government House, at Wellington ; and issued under the Seal of the said Colony, this twenty-fifth day of August, in the year of our Lord one thousand eight hundred and sixty-nine. W. Gisboene. Approved in Council. EoESTER GOEING, Clerk of the Executive Council. G. E. Bowen, Governor. To Oswald Curtis, Esquire, Superintendent of the Province of Nelson; Nathaniel Edwards, Esquire, a Member of the House of Eepresentatives ; William Hunter Eeynolds, Esquire, a Member of the House of Eepresentatives; Henry Howorth, Esquire, a Member of the House of Eepresentatives; George Maurice O'Rorke, Esquire, a Member of the House of Eepresentatives; Edward Cephas John Stephens, Esquire, a Member of the House of Eepresentatives; and Jonas Woodward, Esquire, Eeceiver-General: Wheeeas it was deemed expedient that inquiry should be made into the Laws relating to Building and Land Societies and the operation thereof; and by an Order in Council made on the twenty-fifth day of August, one thousand eight hundred and sixty-nine, I did appoint you, the said Oswald Curtis, Nathaniel Edwards, William Hunter Eeynolds, Henry Howorth, George Maurice O'Eorke, Edward Cephas John Stephens, and Jonas Woodward, Commissioners to investigate and report upon the same, and did will and direct you the said Commissioners, within six months after the date of the said

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Commission, to certify to me, under your hands and seals, or under the hands and seals of any three of you, your several proceedings and your opinion touching the premises : And whereas I have been given to understand that you the said Commissioners took upon yourselves the burden of the investigation directed to be made as aforesaid, but that you did not, within the time in that behalf limited in and by the said Commission, certify to me your proceedings therein, and your opinion touching the matters referred to you: And whereas I have further been given to understand that you are now ready to make such report: And whereas it is apprehended that by lapse of time the said Commission has expired, and that it is necessary, in order to enable you to make such report, that you should be reappointed as hereinafter mentioned : Now know ye that I, Sir George Eerguson Bowen, G.C.M.G., continuing to repose special trust in your knowledge and ability, have thought fit, by and with the advice and consent of the Executive Council, to constitute and appoint, and by these presents, by and with such advice and consent, do constitute and appoint you the said Oswald Curtis, Nathaniel Edwaeds, William Huntee Eeynolds, Henry Howoeth, George Maurice O'Eorke, Edward Cephas John Stevens, and Jonas Woodwaed, to be Commissioners for the like purposes, and with the like powers and duties, as are mentioned, expressed, and contained in the said recited Commission of the twenty-fifth day of August, one thousand eight hundred and sixty-nine, but so, nevertheless, that you do, within fourteen days after the date of this Commission, or as much sooner as the same can be done (using all diligence), certify to me, under your hands and seals, or under the hands and seals of any three of you, your several proceedings and your opinion touching the matters in the said Commission of the twenty-fifth day of August, one thousand eight hundred and sixty-nine, and in this Commission respectively mentioned. Given under the hand of His Excellency Sir George Eerguson Bowen, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Governor and Commander-in-Chief in and over the said Colony of New Zealand and its Dependencies, and Vice-Admiral of the same, at the Government House, at Wellington ; and issued under the Seal of the said Colony, this twenty-fourth day of August, in the year of our Lord one thousand eight hundred and seventy. W. Gisborne. Approved in Council, 24th August, 1870. Eoestee Goring, Clerk of the Executive Council.

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May it please Tour Excellency,— The terms of the Commission intrusted to us by your Excellency being so wide and comprehensive as to include within the inquiry with which we were charged all the legislation of the Colony affecting Land and Building Societies, and also the working of societies as at present constituted, it was judged necessary to obtain as much information as possible concerning the societies in the Colony before proceeding to consider the subject with a view to such recommendations as we might think it desirable to make. A series of questions was therefore prepared, and a copy addressed to each of the societies, to which answers more or less complete have been received from thirty-one out out of thirty-three societies which now are, or recently have been, in operation in the Colony. A. synopsis of these answers is appended to this Eeport. These answers, combined with the evidence which each of the Commissioners obtained in the particular locality in which he resides, have led to the following conclusions : — 1. That existing societies, to a large extent, are not proceeding upon reliable calculations. 2. That the diversity in form and modes of operation is so great as to make it both impracticable and undesirable to obtain uniformity by legislation. 3. That there is at present no safeguard against delusive schemes, should such be proposed. That many societies are not proceeding upon reliable calculations will appear from a mere inspection of the " Summary of Particulars of Terminable Societies " appended to this Eeport (Appendix C). A perusal of the rules of the societies confirms this, as it is found that they are in most instances merely copies of each other, although the rates of subscription and of interest, the method of making loans, and the expected results differ so greatly. The diversities in modes of operation will bo seen by reference to the answers to questions 12, 15, 24, and 25, with Appendices B and C. It is of course probable that local circumstances may cause some of these differences, while others may arise from differences in the end that is sought to be obtained. However this may be, the existence and character of these differences seem alike to prove that it is desirable to allow all societies to accomplish their own ends in their own way, providing that there be some assurance that the way that is taken will secure the end, and that the end and means are alike in accordance with the intention of such societies. That there is at present no safeguard for the public in respect to these societies, is by far the most serious conclusion at which we have arrived. The fact that societies have worked so well hitherto does not disprove this; and we are convinced that the success that has attended them is mainly, if not entirely, due to the good faith and honesty of purpose with which they have been conducted, rather than to the intelligence with which the schemes have been devised. The answers to question 26 show how few of the societies have any satisfactory or intelligible mode of ascertaining their true position. To no other question are the answers so vague and inconclusive, although the point referred to is of absolutely vital importance. The Legislature has attempted to guard against the want of knowledge on the part of promoters of these societies by appointing revising barristers to certify that the rules of each society are in conformity with the law, but we venture to think that it is imperatively necessary that the " Tables " and calculations should be subject to the revision of a person competent to give an authoritative opinion as to their correctness. There is one point connected with the working of a large proportion of existing societies which appears to us highly objectionable : this is the practice of selling shares by auction among the shareholders, or in other words, inviting persons who desire to borrow from the society to compete with each other as to the amount of premium they will give, or deduction they will consent to, in respect of the shares on which they wish to realize. The answers to question 14 show that the majority of those who have had much experience in the working of these societies consider that system to be a great evil, an opinion in which we entirely concur. In submitting to your Excellency the points on which we think that further legislation is required, we beg to repeat that we deem it in every way desirable to interfere as little as possible with the freedom of individual action in respect to these societies. While, therefore, we have to suggest that a Bill may be submitted to tho Legislature for the regulation of Land and Building Societies, we recommend that it should be confined to the following points: — 1. To consolidate tho Land and Building Societies Acts of 1860 and 1869. 2. To prohibit the sale of shares by auction or tender, and to require that in every case the full nominal value of the shares shall be advanced without premium being charged, or deduction made. This provision not to apply to existing societies. 3. To provide for and authorize the winding up of societies, when and if it may be necessary or desirable to do so. 4. To appoint an Inspector whose duty shall bo — (1.) To examine the prospectuses and tables of all Land and Building Societies, and certify as to their correctness and suitability for their intended purpose. No new society to be registered until such certificate is given. (2.) To receive annually from every society in the Colony a statement of its operations and position, also of its assets and liabilities, and to examine and report thereon to the Colonial Secretary. Such statements and reports to be published in the JVeiv Zealand Gazette, and in the Gazette of the Province or County in which the office of the society may be situated. 2

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(3.) To control the power of borrowing given to all such societies, so as to insure that it shall only be exercised in conformity with the terms of the Act or Acts by which such borrowing is authorized. (4.) To furnish periodically, when requested by any society, a table or tables showing the rates at which its shares may be withdrawn, and also at which its mortgages may be cancelled. (5.) To approve of any proposed scheme for winding up a society; such approval to be necessary before the winding-up shall become lawful. All of which is now submitted for your Excellency's consideration. E. C. J. Steyens, Chairman, Oswald Curtis, "\ Nath. Edwards, I ~ . . G. Maurice O'Eorke, \ Commissioners. Wellington, 13th August, 1870. J. Woodward, ) APPENDIX A. EEPLIES TO QUESTIONS EELATING TO BUILDING SOCIETIES. I.— What is the name of the Society? 1. Northern Land Association. la. Auckland Land Society, No. 6. Ib. Auckland Land Society, No. 7. 2. Onehunga Land Society. 3. Napier Land and Building Society, No. 2. 4. Wellington Mutual Investment Society. 5. Do. Do. Class No. 2. 6. Wanganui Land, Building, and Investment Society. 7. Provincial Land and Building Society, Permanent. 8. Permanent Building Society of Nelson. 9. Marlborough Building Society. 10. Picton Freehold Land and Building Society. 11. Provincial Investment and Loan Association. 12. Christchurch Land, Building, and Investment Society, No. 2. 13. Lyttelton Land, Building, and Investment Society. 14. Do. Do. Do. No. 2. 15. Kaiapoi Land, Building, and Investment Society. 16. Timaru Land, Building, and Investment Society. 17. Timaru Permanent Mutual Benefit Building and Investment Society. 18. New Zealand Building and Mutual Investment Society, 19. Second Do. Do. 20. Standard Property Investment Society. 21. Otago Ereehold Land, Building, and Investment Society. 22. Argus Building and Investment Society and Savings Institute. 23. Commercial Building and Mutual Investment Society. 24. Tokomairiro Property Investment Society. 25. Bruce Property Investment and Building Society. 26. Tuapeka Mutual Benefit Building and Investment Society. 27. Oamaru Land and Building Investment Society. 28. Southland Building, Land, and Investment Society. 29. Western District Building and Land Society. 2. — In what City or Town is the Society's Office situated? 1. Auckland. 9. Blenheim, Marlborough. 20. Dunedin. la. Do. 10. Picton. 21. Do. Ib. Do. 11. Christchurch. 22. Do. 2. Onehunga, Auckland. 12. Do. 23. Do. 3. Napier. 13. Lyttelton. 24. Milton, Tokomairiro District, 4. Wellington. 14. Do. Otago. 5. Do. 15. Kaiapoi, Canterbury. 25. Do. 6. Wanganui, Province of Wei- 16. Timaru, Do. 26. Lawrence. lington. 17. Do. Do. 27. Oamaru. 7. City of Nelson. 18. Dunedin. 28. Invercargill. 8. Do. 19. Do. 29. Eiverton. 3. — When was the Society formed ? 1. August, 1865. 10. In 1863. ' 20. Ist March, 1867. la. March, 1864. 11. January, 1863. 21. October, 1868. Ib. May, 1865. 12. Ist September, 1868. 22. November, 1868. 2. May, 1864. 13. January, 1862. 23. 13th December, 1869. 3. 10th January, 1870. 14. October, 1865. 24. 7th December, 1863. 4. 30th March, 1864. 15. October, 1867. 25. Ist December, 1868. 5. 30th March, 1868. 16. October, 1864. 26. April, 1867. 6. December, 1865. 17. March, 1870. 27. 3rd December, 1864. 7. January, 1861. 18. 2nd December, 1863. 28. sth May, 1869. 8. 21st April, 1862. 19. Eebruary, 1864. 29. 13th September, 1869. 9. July, 1862.

LAND SOCIETIES COMMISSION.

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4.— ls the Society terminable or permanent ? If terminable, at what period ? No. Character. When Terminable. 1. Terminable. ... ... ... August, 1869, la. Do. ... ... ... In four years from commencement. Ib. Do. ... ... ... Do. do. 2. Do. ... ... ... Expired 23rd May, 1868. 3. Do. ... ... ... In four years, or when £20 16s. per share is obtained. 4. Do. ... ... ... In ten years, or when £50 per share is obtained. 5. Do. ... ... ... Do. do. 6. Do. ... ... ... When £20 per share is obtained. 7. Permanent. ... ... ... (Originally terminable) 8. Do. 9. Terminable (originally permanent). About December, 1873. 10. Do. ... ... ... " Will terminate in about two years." 11. Do. ... ... ... In nine years from commencement. 12. Do. ... ... ... When £100 per share is obtained. 13. Do 14. Do. ... ... ... „ „ „ 15. Do. 16. Do. ... ... ... October, 1872. 17. Permanent. 18. Terminable. ... ... ... Ten years, or under. 19. Do. 20. Permanent. 21. Terminable. ... ... .., "In about seven or eight years." 22. Permanent. 23. Do. 24. Terminable. ... ... ... Probably in about seven years and nine months. 25. Do. ... ... ... When £25 per share has been obtained. 26. Do. ... ... ... About 1875. 27. Do. ... ... ... When £60 per share has been obtained. 28. Do „ £25 „ 29. Do „ £25 5. Do you consider terminable or permanent Societies the better, and why ? No. Preference. Reasons. 1. Terminable. Members wish to realize a certain sum at a given period. la. Terminable for borrowers. Permanent for investors. Ib. Terminable " on the whole." 2. Permanent. Giving greater security. 3. Terminable. More suitable for colonists, especially in small places. 4. Permanent. Terms could be absolutely fixed. Use is constantly found for funds, instead of being interrupted by termination of society. Period of loans could be varied to suit convenience of borrowers. (Same answer given by Nos. 5, 6, and partially by Nos. 20, 22, and 23). 6. Terminable. More suitable for colonists, especially in small places. 7. Permanent. Better, "if worked on an equitable principle." 8. Do. Trouble saved in investment of funds. 9. Terminable. Terminable more suited for small towns ; permanent for large towns. 10. Do. " Eor our purposes." 11. Do. Because of the fluctuation in the value of securities. (No. 12 gives same reason, adding, " especially for small communities.") 13. Permanent. Because there would be a more equal demand for the Society's capital. (Same answer given by Nos, 14 and 20.) 15. No answer. 16. Permanent. Eor the readiness with which members could be admitted, and greater certainty of results. (Same answer given by No. 17.) 18. Do. No reason assigned. 19. Both equally good. 21. Terminable for investors, permanent for borrowers. 22. Permanent. Terms for borrowers are more equitable. Profits can at any time be ascertained. There is less inducement to accept doubtful securities. Withdrawing shareholders are more easily dealt with. 24. Do. Work more uniformly. (Same answer given by No. 25.) 26, 27, 28, and 29. No answer. 6.— What is the monthly contribution for each share? Nos. 1, la, Ib, and 2. Bs. Bd. per month, payable weekly; 3. Bs. Bd. per month, payable fortnightly ;4. 55.; 5. 55.; 6. 35.; 7. 4s. ;8. 35.; 9. 35.; 10. 2s 6d.; 11. 55.; 12. 10s., " and sixpence working fee ;" 13. 10s. 6d. ; 14. 10s. 6d.; 15. 10s. 6d.; 16. ss. 6d.; 17. 2s. 6d.; 18. 10s.; 19. 55.; 20. 45.; 21. 10s.; 22. 10s. for terminable share, £50 at once for permanent share.; 23. 2s. fortnightly ; 24. 45.; 25. 3s. ; 26. 55.; 27. ss. ; 28. 45.; 29. 4s. 7.' — What amount will be payable in respect of each share at the termination of the Society ? 1, la, Ib, and 2. £20 165., with interest and profits ;3. £20 165., with profits ; 4. £50; 5. £50 ; 6. £20; 7. £25; 8. £20; 9. £20; 10. £25; 11. £50; 12. £100; 13. £100; 14. £100; 15. £100; 16. £50; 17. £25; 18. £120; 19. £60; 20. £25; 21. £120; 22. £50; 23. £25; 24. £30; 25. £25; 26. £60; 27. £60; 28. £25 ; 29. £25.

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12.— 0n what terms are advances made to shareholders when shares are realized? 1. At 8 per cent, interest to termination of Society. la, and Ib. On mortgage ; principal repaid by value of shares. 2. No answer. 3. At 10 per cent, interest; shares allotted by ballot. 4. £50 advanced to borrower, who pays 15s. per month until termination of Society. 5. Do. do. do. 6. By auction at 20s. per share. Interest 10 per cent., and 1 per cent, commission. 7. Interest at 10 per cent., and contributions. 8. By auction. Interest, 10 per cent., and 1 per cent, commission. 9. Do. at bonus of 5 per cent. Interest, 10 per cent. 10. At a premium of £1 per share. Interest, 10 per cent. 11. £50 advanced ; borrower pays 15s. per month. 12. " Deduction of not less than £40 from value ; ss. per month payable besides contributions." 13. By auction ; extra subscription of 6s. per month. 14. Do. do. do. 15. " 6s. per share per month, in addition to the 10s. 6d." 16. By auction. Interest at 5 per cent., and ss. per share " sinking fund." 17. To be repaid, principal and interest, in four, six, eight, ten, or twelve years. Interest at 10 per cent, on decreasing amounts. 18. 10s. per share per month. 19. 10s. per share per month additional, and a premium on the advance. 20. Varying payments for differing terms. 21. Not answered ; (20s. per month per share, per rules). 22. On payment of a fixed number of instalments of 10s. per share. 23. Not answered ; (about 11 per cent., per rules). 24. By auction. Interest on full value at 5 per cent. (Interest said to be much too low.) , 25. Do. do. do. 8 per cent. 26. Do. 10s. per month payable in addition to subscription. 27. Do. 10s. do. do. do. 28. { 29. Interest at 5 per cent, per annum. (By auction.)

many s, '.ares are currem No. Unrealized, j Advanced. Realized. Total. No. Unrealized. Advanced. Realized. Total. 1 Ia 1b 2 3 4 5 6 7 8 9 10 11 12 13 14 773 1,456 926 122 59 1,378 418 328 147 1,211*4 208 109 1,931 54! 128 147 773 1,456 926 342 386 3,722 3,993 913 193 2,829 244 219 2,538 582 161 383 15 16 17 1.8 19 20 21 89 117 1,338 227| 268! 1474 464 24 279 113; 390 1,338 1,120 571 2,079 494| 327 2,188 3,575 390 46 1,617A I 36 110 607 527! 27 236 220 156 195 6 "2711 62i 302! 005 30J 22 Permanent 1 147 Cannot 110 975 355! 407! 975 500 24 172 23 24 25 26 27 28 29 state yet 52 282 80 136i 95 02 444 1,055 492 750 1,037 500 "247! No. 1. 90 Ia. 168 1b. 118 2. 60 3. 70 4. 519 9.— By how many persons are the shares held ? No. No. No. No. No. 5. 665 10. 40 15. 46 20. 224 25. 138 6. 70 11. 239 16. 56 21. 148 26. ... 7. 29 12. 191 17. 96 22. 50 27. 165 8. 271 13. 61 18. ... 23. ... 28. 239 *9. 36 14. 129 19. 66 24. 48 29. 128 No. 1. 40 Ia. 40 1b. 50 2. 31 3. 25 4. 221 10.— What is the largest number of shares- held by any one person ? No. No. No. ... No. No. 5. 400 10. 26 15. 8 . 20. 100 25. 40 6. 60 11. 169 16. 40 21. 12 26. 20 7. 12 12. 32 17. 130 22. 14 27. 24 8. 90 13. 11 18. 20 23. 15 28. 30 9. 15 14. 12 19. 40 24. 25 29. 20 No. 1. 40 Ia. 40 1b. 50 2. 18 3. 10 4. 120 11, — What is the largest number of shares realized by any one person? No. No. No. No. No. 5. 50 10. 16 15. 7 20. 60 25. 6 6. 25 11. 169 16. 40 21. 6 26. 13 7. 12 12. 8 17. ... 22. 4 27. 23 8. 90 13. 8 18. 17 23. ... 28. ... 9. 15 14. 20 19. 35 24. 25 29. ...

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13.— D0 you find that the system of selling shares by auction tends to make it more or less doubtful when the Society will terminate ? 1. Not in a terminable Society. 19. "It renders it doubtful." la, Ib, and 2. No experience. 23. No experience. 3. More doubtful. . 24. Premiums from sales will shorten term of 4, 5. Yes ; more doubtful. Society. 6. Not certain. 25. Same answer as last. 8. More doubtful. 26. Do not think it makes any difference. 10. More doubtful. 27. More. 12. Less doubtful. 28. (As Nos. 24 and 25.) Nos. 7, 9, 11, 13-18, 20-22, and 31 do not show in their answers whether they think it would be " more " or " less " doubtful. 14.— D0 you consider that the pecuniary necessities of shareholders frequently lead them to bid too high a discount at the sale of shares ? 1. Yes, at times. 13, 14. Occasionally, not frequently. la, Ib, and 2. No experience. 15. No. 3. No experience, but consider the auction system 16,17. Yes. a great evil. 18. In very few cases. 4. Yes, after an experience of twenty-four years. 19. Probably. 5. No experience. 20. Yes. 6. Most certainly. 21. Perhaps so. 7. Very frequently. 22. Necessity and ignorance combined. 8. Yes ; sometimes to a ruinous extent. 23. No experience. 9. Yes ; decidedly. On one occasion 81£ per cent. 24. Sometimes. given. 25. Has not observed it. 10. At times. 26, 27. No answer. 11. Yes ; most decidedly so. 28, 29. Have not found it so. 12. " In this Society, No." 15. — Does the Society mahe advances by way of ordinary mortgage — that is to say, without shares being realized ? If so, on what terms ? 1, la, and Ib. No. 16, 17. Not yet. 2. Yes ; at 8 per cent., payable half-yearly. 18. No. 3. None have been made. 19. Not yet. 4, 5. Yes, when capital accumulates, at 10 per 20, 21. No. cent. 22. Not vet. 6. Yes; at 10 and 12 per cent, 23. No. " 7. Yes, when capital accumulates, at 10 per cent. 24, 25; Yes. 8. 9, 10, 11. No. 26. No. 12. Not at present. 27, 28. Yes ; when shares are not taken, at 10 per 13, 14. Yes, when capital accumulates, at 10 and cent. 12J per cent. 29. No. 15. Yes; over £100, at 10 per cent.; under £100, at 12 per cent. 16.— Are such advances as are referred to in Question 15 made to shareholders only, or are they made to non-shareholders also ? 2. To shareholders only. 7. To either —shareholders in preference. 3. To shareholders only, as yet. Will probably be 12, 13, 14, 15. To either. made to others by-and-by. 19, 22. To either. 4,5. To non-shareholders only,all borrowers being 23. Shareholders only. treated as non-shareholders, although they 24. To members first. hold shares. 25, 27. To either. 6. To either. 28. To shareholders only. Nos. 1, la, le, 8, 11, 16-18, 20, 21, 26, and 29 have not answered. 17.— Are advances made on freehold property only, or are advances made on leaseholds also? 1. Freehold and leasehold. 11. On leasehold occasionally, but think it la, Ib. Both ; but think advances on leaseholds decidedly objectionable. a mistake. 12, 13, 14. Both. 2. Freehold and leasehold, at discretion of Trustees. 15. Freehold only. 3. Freehold and long leasehold. 16, 17, 18. Both. 4. 5. Freehold only. 19, 20, 21,22, 23. Both; freeholds preferred. 6. On both. 24, 25, 26, 27. Freehold only. • 7, 8, 9. Freehold only. 28. Both. 10. No answer. 29. Freehold only. 18. — Is there in all mortgages to the Society in which buildings are included, a stringent provision for fire insurance? Nos. 1, la, Ib, 3-5, 7-19, and 21-29, answer " Yes ;" and Nos. 2, 6, and 20 answer " Where required." 3

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REPORT OF THE BUILDING AND

19.— 1n what manner are the law costs for mortgages, total releases, partial releases, and approving of leases or tenancies mortgaged to the Society, regulated ? 1, 2. Mortgagor pays all. 15. Agreed scale of charges. la, Ib. Mortgagor employs any Solicitor. 16. No arrangement. " Bate exorbitant." 3. Fees regulated by fixed scale. 17, 18. Scale of charges. 4,5. Deeds prepared by Solicitor to Society, 19. Fixed rate of £3 3s. for mortgages. at expense of mortgagors. No arrangement. 20. Fixed rate of £2 2s. for mortgages. Begis6. Fee of £2 2s. for each deed. Eegistration tration, &c, additional. extra. 21. By uniform fee, arranged with Solicitor. 7. By arrangement between Directors and 22, 23. No arrangement. About £5 ss. is Solicitor. believed to cover all costs. 8. By contract with Solicitor. 24, 25. Society has forms of mortgage. 9. Mortgage, £1 lis. 6d. ; lease, £1 Is.; regis- 26. As No. 22. tration extra. 27. No arrangement, but subject to approval of 10. Solicitor charges about half-price. Committee. 11. Agreed scale of charges. 28. By arrangement with Solicitor. 12, 13,14. Agreement with Solicitor for mortgages 29. By fixed scale. only. 20. — In the event of a sale of mortgaged properly, do you give the defaulting mortgagor credit for a share of the profits in the same manner as you would a mortgagor releasing his security ? 1. Yes. 17. Yes. la, Ib. No. 18. Yes, if fines are charged. 2. No; profits are absorbed by fines before sale. 19, 20, 21. Yes. 3. Probably; it is not fixed, but may be, at least at 22. It is believed so. close of Society. 23. According to circumstances. 4. 5. Precisely the same. 24, 25. No experience. 6. No case occurred. 26. Yes. 7, 8, 9, 10, 11,12,13, 14, 15. Yes. 27. No. 16. Yes, if fines are charged. 28, 29. Yes. 21.— D0 you consider a borrowing member entitled to be a member of Committee or a Director ? 1, 2. Certainly. 10. Not without he holds two unrealized shares. la, Ib. Yes. 13, 14. Yes; decidedly. 4, 5. No; members of Committee must hold five 16. Yes ; otherwise the Society would be worked unrealized shares. for the benefit of investors only, and not 6. Yes ; realized members have a double interest equitably. in the well-doing of the Society. 18. Certainly. 7. Yes; so long as they do not constitute a 19. Committee should consist of both classes. majority. 24. On principle, no; in practice, they must be 9. Not the most eligible, but not to be avoided. admitted. Nos. la, 3, 8, 11, 12, 15, 17, 20-23 and 26-29, answer " Yes." 22.— Does the Society receive money by ivay of deposit? If so, on what terms? 4. Yes ; £50 and upwards, for six months, 6 per 13, 14. None has been offered. cent; under £50, or less than six months, 17. Yes; at 5, 6, and 7 per cent, for three, six, 5 per cent. and twelve months. 5. Not at present. 18. Yes ; at current rates, when required. 7. It did, but does not now. 22. No ; Eegistrar refused to certify to rule giving 8. Only as payments in advance —8 per cent, per power to receive deposits. annum allowed as discount. 23, 24, 25. No ; excepting payments in advance. 11. When there was use for the money —at 6, 7, 26. Yes ; would give 5 per cent, or 8 per cent, for six, nine, or twelve months. Nos. 1, la, Ib, 2, 3, 6, 9, 10, 12, 15, 16, 19-21, and 27-29, answer "No." 23.— Does the Society borrow money from its banker, or otherwise ? If so, from whom, on what security and on ivhat terms ? 3. Not as yet. 17. Not yet. 4, 5, 6. Occasionally from its banker on agreed 18, 19. From its bankers, or otherwise. terms. 20. From its bankers, and on debentures. 7. Occasionally promissory notes sometimes given. 21. From its bankers, or can do so privately. 8. From its bankers, on promissory notes or 22. From its bankers, or otherwise. security of deeds. 23. Has had no occasion to borrow. 9. Money of matured shares remains at interest. 25. No answer. 11. From bankers, when required. 26. Has borrowed privately. 13, 14. From its banker. 27. From its banker. 16. From bankers, when required. 29. May borrow on debentures, Nos. 1, la, Ib, 2,10,12,15, 24, and 28 answer " No."

LAND SOCIETIES COMMISSION.

11

D.— No. 45.

24.— Sow are the expenses of the Society provided for ? 1. By fines, entrance fees, and 25., 45., and 6s. 16. By 3d. per share per month, and fines, &c. per share. 17. Out of profits. la, Ib. Out of revenue. 18. No answer. 2. By fines, profits, and 16s. per share if required. 19. Out of profits. 6. By fines, commissions, and transfer fees. 20. By 1 per cent, per annum paid by borrowers, 7, 8. By entrance fees, fines, transfers, per cent- also by fees, fines, &c. ages, &c. 21. Out of profits. 9. No answer. 22. By a " loading " on repayments. 10. By fees and fines. 23. Out of revenue. 11. By 2s. 6d. per share per annum. 24, 25. A first charge on profits. 12. 15. By 6d. per share per month. Nos. 3-5, 13, 14, and 26-29 answer " Out of general funds." 25. — What proportion do the expenses of the Society bear to its receipts for subscriptions and interest? 1. Fines, &c, cover expenses. 16. Within 10 per cent. la, Ib. No answer. 17. Not more than 10 per cent. 2. 4e\ per cent. 18. Barely 5 per cent. 3. Not known yet. 19. No answer. 4. 5. About 2i per cent. 20. £5 ss. per cent, nearly 6. 5^ per cent. 21. About a tenth part at present. 7. From 2^ to 5 per cent. 22. Declines to answer. 8. About 2-2 per cent. 23. No experience. 9. About S$ per cent. 24. About 3 } per cent. 10. About one-twentieth part. 25. About 4 per cent. 11. Not quite 4 per cent. 26. About 4| per cent. 12. About 31 per cent. 27. 8 per cent. 13. 14. 2-J- per cent. 28. No answer. 15. One-sixteenth. 29. No answer. 26.—- Upon what principle are the yearly statements of profit and loss made up, especially with regard to the estimation of the value of the shares ? 1. Dr. and Cr. Balance Sheet. 17. Investors are credited with Bper cent., and every la, Ib. No annual statements made. five years 2 per cent, is credited to all share« 3. No statement yet made up. holders. 4. By deducting liabilities from assets, and 18. By valuation. dividing balance by number of shares. 20. "Future repayments discounted at 10 per 7. By valuation. cent, per annum." 8. " On proportion of capital subscribed." 22. By valuation. 9. By valuation. 23. No experience. 16. "As the committee thinks fit." 27. By equal distribution. Nos. 5, 6, 13-15, and 24-26 give similar answers to No. 4. Nos. 2, 10-12, 19, 21, 28, and 29 give no distinct answers. 27. — What is the annual income of the Society, irrespective of deposits or loans? 1. £4,020; la. £7,571 45., with interest on advances; Ib. No answer; 2. £1,900; 3. £2,000 (estimated as above that sum) ; 4. £30,000 (upwards of) ; 5. £14,099 17s. 6d. (first year) ; 6. £2,932 155.; 7. £840; 8. £8,000; 9. £2,300; 10. £1,060 lis. lOd.; 11. £17,925 145.; 12. £3,950; 13. £2,725; 14. £4,262 ; 15. £730; 16. £2,085 ; 17. £2,171; 18. £5,500; 19. £3,528; 20. £6,050; 21. £2,567; 22. £929; 23. No answer; 24. £1,551 19s. lOd.; 25. £2,493; 26. £2,293; 27. £3,000; 28. No answer; 29. £1,365.

28.— What amount has the Society already advanced?

o. By Eealization. On Mortgage. On Shares. Total. No. By Realization. On Mortgage. On Shares. Total. 1 Ia IB 2 3 4 5 6 7 8 9 LO LI :2 13 L4 About £16,000 £16,000 £27,700 £15,600 15 16 17 18 19 20 21 22 23 24 25 26 27 £1,176 £6,859 No answer No answer £18,150 £1,299 £3,660 £1,178 10 0 Nil. £8,460 £2,400 £8,190 £14,490 £150 £1,326 £6,859 £27,700 £15,600 No answer £1,180 £68,900 £20,900 £6,400 £3,675 £69,160 £4,160 £3,754 £105,549 19 6 £2,941 £11,941 £12,518 £61,950 £1,358 £2,419 £1,200 £2,627 £1,180 £133,269 £20,900 £8,958 £3,675 £71,787 £4,160 £3,754 £105,549 19 6 £2,941 £14,461 £12,993 £15,325 £475 £35 £1,560 £18,150 £16,099 £3,660 £1,213 10 0 Nil. £10,020 £2,400 £8,190 £15,695 £1,205 Not allowed by Rules &X0O £475 £850 28 29 No answer £1,550 £1,550 29.— Wh it is the werage amoun, i, which says,' deposits held by the Sc ;" and No. wiety ? All reply " None" exi it present." :ept No. :ia: iout £50,000; 17, which says, " None

REPORT OF THE BUILDING AND

D—No. 45.

12

30.— What is the average amount of money borrowed by the Society? No. 8. £2,000; 9. £1,800 on debentures; 13. Has borrowed about £1,000; 16. £300; 18. £4,263 ; 19. £600 from Bankers, £900 on debentures; 20. £1,000 from Bankers, £4,000 on debentures ; 21. £1,000 from Bankers ; 22. £500 from Bankers ; 26. £1,250. Nos. 1, la, Ib, 2, 3-7, 10-12, 14, 15, 17, 23-25, and 27-29 answer " Nil." 31. — Is there any suggestion you would tvish to make as to the working of the present laws on the suty'ect of Building and land Societies ? Suggestions for alterations in the Law, made by various Societies in answer to question:— Such change in the laws affecting Eeal Estate as would make its transfer easy, rapid, and cheap. Societies should be empowered to receive money on deposit. All Societies should be brought under the supervision of Government through an Inspector. Clauses 6 and 37 of Act of 1866 should be made compulsory, and a form of mortgage given in a Schedule to the Act. Authority given to send deeds for registration by post. Government should guarantee proposals of Society, and receive 1 per cent, on gross profits, —also fixing subscriptions, and verifying tables by its own Actuary. A Eevising Officer should reside in each Province, to whom all minutes of Directors should be submitted. Directors should appoint an Inspector of Society's books. Trustees should be empowered to buy, hold, and sell land. Provisions of 49th section of " Joint Stock Companies Act, 1860," should be applied to Building Societies. Stamps should not be required for transfers of shares. Solicitor's charges should bo fixed. Secretary's salary fixed at a minimum of a percentage on receipts. Section 3 of Act of 1866 is arbitrary and uncalled for. Eevising Officers ought to submit rules to a competent Accountant. The restrictions in section 3 of Act of 1866, on value of shares and amount of subscriptions " are absurd, and defy the first principles of political economy." Professional Auditors, licensed by the Eevising Officer, ought to be resorted to. Limit to borrowing powers, in section 39, is a mistake. The bonus system should be abolished, and a limit to the rate of interest fixed. Societies should publish annual statements, with liabilities and assets valued by an Actuary (form of proposed Eeturn given.) Minors and females should be empowered to hold shares, and to give discharges for payments in respect thereof. Power to lend, under 6th section of Act of 1866, should be extended. Desirable that the auction system should be abolished.

APPENDIX B. SUMMAEY OF PAETICULAES OF SOCIETIES IN NEW ZEALAND.

No. of Societies. No. of Shares. No. of Persons interested. Monthly Subscription. Period. Expected Result. Character of Society. Interest charged on Realized Shares. 1 lA IE 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 773 1,456 926 342 386 3,722 3,993 913 193 2,829 244 219 2,538 582 161 383 113 396 1,338 1,120 571 2,079 4944 172 90 168 118 60 70 819 665 70 29 271 36 40 239 191 61 129 46 56 96 s. d. 8 8 8 8 8 8 8 8 8 8 5 0 5 0 3 O 4 0 3 0 3 0 2 6 5 0 10 6 10 6 10 6 10 6 5 6 2 0 10 0 5 0 4 0 10 0 10 0 8 8 4 0 4 years 4 years 4 years 4 years 4 years 10 years or less 10 years or less When realized Ditto Ditto 11 years 9 years 9 years When realized About 7| years Ditto When realized 8 years When realized 10 years or less When realized Ditto Ditto 6J- years When realized Ditto, about 7J years Ditto Ditto Ditto Ditto Ditto £ s. d. 20 16 0 20 16 0 20 16 0 20 16 0 20 16 0 50 0 0 50 0 0 20 0 0 25 0 0 20 0 0 20 0 0 25 0 0 50 0 0 100 0 0 100 0 0 100 0 0 100 0 0 50 0 0 25 0 0 120 0 0 60 0 0 25 0 0 120 0 0 50 0 0 25 0 0 30 0 0 Terminable Ditto Ditto Ditto Ditto Ditto Ditto Ditto Permanent Ditto Terminable Ditto Ditto Ditto Ditto Ditto Ditto Ditto Permanent Terminable Ditto Permanent Terminable Permanent Ditto Terminable 8 per cent. Ditto Ditto 10 per cent. 10s., month Ditto 10J per cent. 10 per cent. lOy^j percent. 10| per cent. IOJjj percent. 10s., month 5s., month 6s., month Ditto Ditto 5s., month 10 per cent 10s., month Ditto Varying 20s., month Varying 11 per cent. 2s. 6d.,month Borrower receives £60 only. and 5 per cent. 66 224 148 50 444 48 25 26 27 28 29 1,055 492 750 1,037 500 138 165 239 128 3 0 5 0 5 0 4 0 4 0 25 0 0 60 0 0 60 0 0 25 0 0 25 0 0 Ditto Ditto Ditto Ditto Ditto 3s.4d.,month 10s., month Ditto 5 per cent. Ditto

D.—No. 45.

APPENDIX C. SUMMARY OF PAETICULAES OF TEEMINABLE SOCIETIES.

jf.XJ.—The rate per cent, charged to borrowers, shown above, is calculated on the assumption that borrowers get the full value of their shares, with one exception of No. 12, in which a difference is made by the Rules. Where the auction system prevails, the rates of interest are considerably increased.

APPENDIX D. PDEPOSES TO WHICH LEGISLATION HAS BEEN DIRECTED. By Ordinance of legislative Council. To define nature of Societies. To provide for registration. To enable Societies to receive subscriptions and make advances. To enable Societies to makes rules and impose fines. To enable Societies to prescribe forms of mortgages, &c. To make rules binding on members. To enable Societies to appoint officers and committee of management. To restrict investments to real or Government securities. To give remedies against defaulters. To provide for settlement of disputes. To secure annual statement of accounts, and audit of the same. To make receipt of Trustees operate as reconveyance. By Act of 1866. Ec-enacts provisions of Ordinances (altering place of deposit of rules) and adding the following provisions:— To enable Societies to hold land and house for office. To regulate calling meetings of committee and voting thereat. To enable Societies to borrow money on debentures. By Act of 1869. Extends power of borrowing, but limits its exercise to Societies that have been in operation for six months. 4.

13

LAND SOCIETIES COMMISSION

No. of Societies. No. of Shares. No. of Persons interested. Monthly Subscription. Period. Expected Result. Character of Society. Interest charged on Realized Shares. 1 1 1 1 1 2 2 1 1 2 1 2 6 3 0 3 0 3 0 4 0 4 0 5 0 5 0 5 0 5 0 5 6 9 years 11 years When realized 7f years 71 years 7i years 7f years When realized 9 years 10 years or less 8 years 25 0 0 20 0 0 20 0 0 25 0 0 30 0 0 25 0 0 60 0 0 60 0 0 50 0 0 50 0 0 50 0 0 Terminable Ditto Ditto Ditto Ditto Ditto Ditto Ditto Ditto Ditto Ditto lOtgper cent. IO5 per cent. IOJ per cent. 3s.4d., month 2s.6d., month 5 per cent. 10s., mouth 10s., month 10s., month 10s., month 5s., month = 8 per cent. = 5 per cent. = 12 per cent. = 12 per cent. = 12 per cent. = 12 per cent, and 5 per cent., = 11 per cent. 4 1 1 1 1 2 1 8 8 8 8 10 0 10 0 10 6 10 6 10 6 4 years 4 years 10 years or less When realized Ditto 7J years When realized 20 16 0 20 16 0 120 0 0 120 0 0 100 0 0 100 0 0 100 0 0 Ditto Ditto Ditto Ditto Ditto Ditto Ditto 8 per cent. 10 per cent. 10s., month 20s., month 6s., month 6s., month 5s., month = 6 per cent. = 12 per cent. = 3f per cent. = 3-ij- per cent. Borrower receives £60 only= 5 per cent. 1 1 1 1 1 1 2 6 3 0 4 O 4 0 8 8 10 0 Ditto Ditto Ditto Ditto Ditto Ditto 25 0 0 20 0 0 25 0 0 25 0 0 25 0 0 50 0 0 Ditto Ditto Ditto Ditto Ditto Ditto 10 per cent. 10 T \ T per cent. 10 per cent. Varying. 11 per cent. Varying

iOCIETIES IN ICTOEIA. 1 1 1 2 2 5 0 5 0 When realized 25 0 0 Permanent Varying Ditto ... 25 0 0 Ditto Ditto Ditto ... 50 0 0 Ditto Ditto = llf- per cent. for ten years. = 12J per cent. for ten years. = 9f per cent. for ten years.