These societies are frequently organized along national lines. For
example, among those listed in 1893 by the United States Commissioner
of Labor[28] are the Bohemian Building and Loan, organized February 1,
1886; the Bohemian California Homestead (February 15, 1892); the
Bohemian National Building Loan and Homestead (January 30, 1888); the
Bohemian Workingmen's Loan and Homestead (April 20, 1890); the Ceska
Koruna Homestead (May 6, 1892); the King Kazimer the Great Building
and Loan (January 27, 1886); the King Mieczyslaus the First National
Building Loan and Savings Bank (June 3, 1889); King Zigsmund the First
Building and Loan (April 15, 1891). December 1, 1918, there were 681
such organizations in Illinois; 255 of these were in Chicago and the
majority were conducted and patronized by the foreign born.
The following is briefly the method by which the building and loan
associations perform the two services of providing for investment and
lending money on homes:[29]
The stockholder or member pays a stipulated minimum sum, say
one dollar, when he takes his membership, and buys a share of
stock. He then continues to pay a like sum each month until
the aggregate of sums paid, augmented by the profits, amounts
to the maturing value of the stock, usually $200, and at this
time the stockholder is entitled to the full maturing value
of the share, and surrenders the same.
A shareholder who desires to build a house and has secured a
lot for that purpose, may borrow money from the association
of which he is a member. Suppose a man who has secured his
lot wishes to borrow $1,000 for the erection of a house. He
must be the holder of five shares in his association, each
share having as its maturing value $200. His five shares,
therefore, when matured, would be worth $1,000, the amount of
money which he desires to borrow.... In a building and loan
association the money is put up at auction, usually in open
meeting on the night or at the time of the payment of dues.
Those who wish to borrow bid a premium above the regular rate
of interest charged, and the one who bids the highest premium
is awarded the loan. The man who wishes to build his house,
therefore, and desires to borrow $1,000, must have five
shares of stock in his association, must bid the highest
premium, and then the $1,000 will be loaned to him. To secure
this $1,000 he gives the association a mortgage on his
property and pledges his five shares of stock. To cancel this
debt he is constantly paying his monthly or semimonthly dues,
until such time as the constant payment of dues, plus the
accumulation of profits through compounded interest, matures
the shares at $200 each. At this time, then, he surrenders
his shares, and the debt upon his property is canceled.
[Illustration: ITALIANS HAVE THEIR OWN FINANCIAL CENTER AND LABOR
MARKET IN BOSTON]
In some cases the sums paid are fifty or even twenty-five cents a
week, and the shares may be $100 instead of $200. Among some groups
shares are taken in the name of each of the children, and the
investment constitutes an educational fund. There are those,
however, for whom the building and loan has not provided adequate
opportunity for deposit and safe investment. It is probable that the
building and loan has proved most efficient for the income group
$1,500-$1,800. For the group below that, home ownership is for the
time impossible. As a device for saving, for both the lower and higher
income groups, who come from countries familiar with similar devices,
the postal savings banks are supposed to offer efficient, honest, and
convenient service.