1893 - State Library Information Center

CO-OPERATIVE BUILDING AND LOAN ASSOCIATIONS. 469payment of Buch shares. Of the four methods in use in thiscountry it has discouraged two, the accumulation of a sinkingfund or the borrowing of money from the banks for this purpose.It has strongly recommended the gradual increasing of the withdrawalvalue of shares to as near as practicable the holding value.While this, doubtless, encourages the withdrawal of free sharesas they near maturity, it has not been found to be a solution ofthe problem. Probably a system of forced withdrawals wouldbe, but this is not altogether unobjectionable. Ou the otherhand, Judsje Seymour Dexter's plan, a brief outline of whichwas given in his address before the New Jersey League meeting,at Trenton, January 21st, 1892,* appears to be the most practicableas well as the fairest. This has been formulated in fullerdetail at the request of the Bureau, and is here reproduced:"In answer to your request I will explain what I regard as preeminentlythe best plan to be pursued in paying matured sharesby local building and loan associations, organized upon the Berialplan of issuing stock." The articles of association and by-laws of an association shouldprovide that, when there are matured shares unpaid, one-thirdof the receipts should be applicable to the payment of maturedshares, one-third to borrowers and one-third to withdrawers ofnon-matured shares. In case the demand by the withdrawers ofnon-matured shares does not take all of the one-third of receiptsset apart, whatever remains should be applicable to the paymentof matured shares, and the same rule to apply to the one-thirdset apart for borrowers. From the time the stock is declaredmatured by the board of directors until it ia paid, it should drawinterest at the rate of— per cent, per annum. The rate per cent,should be fixed by the current rate in the community in savingsbanks or other banks that receive money on deposit and payinterest thereon." The holders of matured stock should file their applicationsfor payment of the same. Payment should be made in the orderin which such notices are filed with the secretary. When thearticles of association and the by-laws thereunder provide for this.mode of paying off matured shares, the shareholders allow theirstock to mature with the understanding that they may be obliged* See Bureau report for 1891, p. 559.