1893 - State Library Information Center

CO-OPERATIVE BUILDING AND LOAN ASSOCIATIONS. 457being the actual capital invested. This account is balanced andclosed, not only at the end of every fiscal period, but previous to anychange in the personnel of the partnership. If this account werealways left open in the manner which the equivalent account inbuilding associations iB, a business man would never know howhe stood. Again, a business man desires to know his profits forevery fiscal period, so that he may make comparisons; but howis he to do this ualeBB the profit and loss account for each fiscalperiod is kept separate ?If, therefore, I am right in my contention, and I think.youwill admit I am, we ought to have before us certain facts, carefullyand clearly arranged, before a division of profits is attempted.1st.. An account which will show the capital of each member,so that there can be no doubt as to the amount which is to sharein the profits.2d. An account which will show the profits of each fiscal perioddistinct and separate from each other.So far as the first is concerned every building association hassuchan account. A formal one exactly like that used in mercantilebusiness would take too much time and be far too cumbersome,and, besides, is unnecessary, as every association gives toits members at least once a year, in its published statement, thevalue of each share, and in this respect the statement is as gooda piece of bookkeeping, as if a formal ledger account were openedto each member. It is strange that with so simple and clear astatement of the items of which the aggregate capital is composed,there should be so much difficulty among writers on buildingassociation matters in ascertaining the capital to which theprofit is to be distributed. The capital actually invested is thedues plus the accretions. Even Dexter states the capital to bethe balance shown at the beginning of the year, forgetting thatwithdrawing members withdrew their capital as well as theirshare of the profits. The desideratum, therefore, is an intelligiblestatement of profit bearing capital. How to get this I willmake clear when I come to the exemplications of my suggestedplan. The real and most troublesome difficulties are connectedwith this latter point and the failure to observe the second propositionnamed above. In other words, there should be no redistri-