and closed its business satisfactorily to the members, June 25,
1853. John B. Duff, a lumber counter by trade, was instrumental in
organizing the first building society within the compactly built up
city of Philadelphia, in the year 1847. The name of the society was
the “Kensington Building Association.” The society issued five hundred
shares of stock in one series, and wound up its affairs in ten years
and two months after it was organized. The first advertisement of any
building and loan association, so far as can be ascertained, appeared
in the Philadelphia “Public Ledger,” February 5, 1847, and called for
a meeting of the “Kensington.” Mr. Duff died in 1883, and a few months
before that event he presented to the writer a document now known as
“The Old Yellow Poster.” It is the call for the first building society
in Old Philadelphia, a copy of which is herewith presented.
Mr. Duff seldom, if ever, held forth in public, but his efficient work
was done by taking individual cases and converting them to the benefits
of obtaining homes for themselves. Frequently he has been seen on a
pile of lumber with chalk in hand, demonstrating a problem in building
society arithmetic to converts to this system of saving.
[Illustration:
MEETING!
KENSINGTON
BUILDING ASSOCIATION
The Subscribers being desirous of forming an Association for the
purpose of assisting the members thereof in the erection of Dwelling
Houses, or such other Real Estate as they shall deem most advantageous,
have concluded to hold a Meeting for that purpose
ON FRIDAY EVENING, 22D JAN’Y, 1847,
AT 7 O’CLOCK,
_At the Kensington Engine Hall_,
On Queen Street, above Marlborough St.
Where the objects of the Association will be laid before the Meeting.
Citizens generally, are invited to attend.
Ralph Pilling,
Joseph Smith,
John Bierly,
John B. Duff,
Henry Shermer,
John Verdear,
Samuel Wensell,
Samuel T. Hay,
Henry Lane,
Howard Bowman,
Andrew Himes,
Rich’d. Fordham,
David Guyant,
Geo. Fordham,
Henry Kriener,
Abr. P. Eyre,
Ed. W. Gorgas,
Alfred Fitler,
Alb’t T. Eggleton,
Albert Engle,
And. Flanders,
Thomas Bennett,
J. R. Fullerton,
Charles Tryon,
Samuel Parcels,
Edward Owens,
Jacob Jones,
John Nevling,
Henry Mosser,
Geo. Kennerd,
Henry Mercer,
George Mattis,
Michael Collar,
Edward Wester,
Henry Miller,
William Ellis,
John Hearney,
Jos. B. Matlack,
Saml. Biedaman,
J. Shilingburg,
James Hill,
George Cramp,
George Coleman,
John Fordham.
January 21, 1847.
Printed at Boyle’s cheap Printing Establishment, corner of Second and
Brown streets.
CALL FOR FIRST BUILDING ASSOCIATION IN PHILADELPHIA.]
There has been scarcely a great mind in the country that has not moved
the lips to say some good word for the building society cause. Henry
Ward Beecher in a sermon said,—
“I think that a young man who places before himself not a speculation,
not a fortune, but some object that he means to achieve, who selects
a particular piece of property that he would like to own, and aims
steadily at acquiring it and works diligently for it, and saves for
it, will be almost sure to succeed. I will say that every young man in
a city, either through the instrumentality of a building association
when there is one, or independently, when such an association does not
exist, and when at last, having toiled and waited patiently, the debt
is paid and the piece of property is earned, is a great deal richer
than the assessor knows him to be. The assessor goes around and puts
a valuation upon his property for the purpose of taxing it. But, ah,
those habits of industry and self-control; those wise measurings,
which we call economy,—all these the man has gained over and above
the property. He has saved himself from a thousand temptations. He has
protected himself against remorseless vices, which would have gnawed
out his marrow. And though you call it merely amassing property, it may
be amassing manhood. It is one step on the upward way.”
State officials who closely examine the workings of these societies
never seem to tire in their praise. Superintendent Kilburn, of New
York, in his last annual report, refers to the conservative and
honestly managed building association as follows:—
“During the past year associations of this class alone have returned to
withdrawing members dues and profits amounting to $8,014,039. During
the same period no less than fifty-seven associations were engaged
in the payment of matured shares, and $829,752 were paid to members
who had faithfully continued payments through a series of years, and
at last saw their confidence justified. But these sums are of small
consequence when we consider the comfortable homes that have been
erected, and the families that have been permanently and comfortably
housed through the facilities for frugality and thrift, for self-denial
and saving afforded by them. My attention was recently called to a
village of the State in which it was said that nearly one-third of the
houses had been erected through the agency of a small local association.
“Nor is this an exceptional case, unless the element of proportion be
taken into consideration. In nearly all the cities of the State, and in
many of the large villages, there are associations that are models of
their kind, and are worthy of the admiration and support of every good
citizen.
“Their educational influence, too, can hardly be over estimated.
The workingman who joins such an association takes part in the
administration of its affairs and learns his first lesson in finance
from those of larger experience, and, who perhaps, touches elbow with
the lawyer, the merchant, and the minister as they discuss the safety
of an investment, or proper amendment to the articles of association,
and will not lend a ready ear to teachers of socialism, of class
hatred, or of financial heresies.”
As shown elsewhere, the members of the New York societies have over
$37,000,000 invested. The Building Association League of Pennsylvania,
an organization of twenty-six years’ standing, composed of the
most active associations in the State, some years ago proclaimed a
“Declaration of Principles,” from which we quote:—
“The local building societies of the State of Pennsylvania are
true coöperative organizations, transacting no business with the
public, and not amenable to laws affecting financial institutions
that have dealings with the public. They encourage thrift among the
wage-workers, help to create taxable property in its best form—real
estate, educate their members in business methods and teach them both
how to save and how to invest money.
“By this service they have created a state police of tens of thousands
of home owners, more efficient for the protection of life and property
than a standing army.
“They have lessened the cost for the maintenance of alms-houses,
prisons, and asylums, by teaching men and women to be self-helpful and
self-reliant, and in that way have benefited the State to an amount far
exceeding any sum that could be gathered by taxation.
“The work of the societies is done gratuitously by the directors,
and in no other way could they be maintained, the profits resulting
from the services of men who, though they have never posed as
philanthropists, are engaged in the best kind of charity, helping men
and women who help themselves.”
Joseph H. Paist, a prominent Philadelphia building association expert,
has been president of the league since it was organized.
Other States have leagues, and they are all combined as a National
League, whose motto is “The American Home is the Safeguard of American
Liberty.”
At certain intervals the national government, States, cities, and
hundreds of industrial enterprises distribute earnings and accrued
interest to those entitled to the same. The vast sums of money
drawn out of thousands of banks and banking institutions represent
millions of dollars of canceled debts. Within a few days after these
distributions take place, at least nine tenths of this money finds its
way back into the strong boxes that parted with it. One tenth of the
money is, perhaps, held in the pockets of the people, to be gradually
disbursed for current needs until the next pay arrives. I do not
remember having received a statement or statistical report referring to
the building association share in these distributions.
True, there are no set dates for building societies to part with money,
but in Pennsylvania alone these coöperative companies distribute
$20,000,000 annually in matured shares and withdrawals. This is no
insignificant sum. To-day their accumulated wealth (mostly savings of
people in the humbler ranks of life) is over $107,000,000, and in the
United States fully $600,000,000. The annual outgo for canceled shares
is about $100,000,000, or fully $8,000,000 every month.
Since these associations were organized, quite one thousand five
hundred million dollars have been returned to the members in the value
of homes clear of debt and in cash for withdrawn and matured shares.
Despite these vast disbursements, there has been a gradual increase in
their assets from year to year.
Beginning with one association in 1831, their number increased in a
small way until probably not over two hundred societies existed in
1800. From that date until the present moment it is estimated that over
8000 have been organized throughout the land, increasing at a rapid
rate every year, and leaving at present, after closing out a great
number, nearly 5000 active associations distributed among the States as
follows:—
--------------+------------+-------------+-------------
| No. of | |
States. | Societies. | Membership. | Assets.
--------------+------------+-------------+-------------
Pennsylvania | 1200 | 300,000 | $111,714,871
Ohio | 761 | 297,787 | 99,770,161
Illinois | 682 | 180,000 | 73,309,192
New Jersey | 300 | 116,739 | 41,038,934
Indiana | 492 | 137,510 | 37,624,418
New York | 317 | 102,902 | 37,385,642
Massachusetts | 123 | 65,419 | 24,507,843
Missouri | 255 | 49,462 | 22,497,700
California | 138 | 19,153 | 17,938,100
Iowa | 87 | 25,000 | 6,594,778
Michigan | 70 | 20,497 | 6,495,307
Minnesota | 69 | 9,000 | 4,260,666
Tennessee | 34 | 6,166 | 3,771,354
Nebraska | 68 | 11,821 | 3,554,788
Connecticut | 15 | 11,208 | 3,243,935
Maine | 33 | 8,230 | 2,912,963
Other States | 228 | 281,284 | 104,320,367
| | +-------------
Totals | 4872 | 1,642,178 | $600,941,019
--------------+------------+-------------+-------------
It is estimated that of the above named membership over 325,000 are
women. Of the $600,000,000 of assets, at least $100,000,000 is a gain
credit to the sharer. It is believed that an average of at least three
members of a family contribute toward the payment of the dues and
interest, and although seventeen hundred thousand names are on the
books, nearly five million persons actually contribute.
These societies have done more to teach the people practical thrift
than any known device ever promulgated. Thrift is described as “good
husbandry, economical management in regard to property, success and
advance in the acquisition of property, increase of worldly goods,
vigorous growth, as a plant.”
“He is a good wagoner that can turn in a little room.”—Bishop J. Hall.
“Economy is the parent of integrity, of liberty and of ease, and the
beautiful sister of temperance, of cheerfulness and health. Without
economy none can be rich, and with it few can be poor.”—Dr. Johnson.
While these literary economical truths proclaimed in all ages by wise
men, which they themselves very seldom knew how to put into practical
use, have no doubt caused millions to think and wonder how to do it,
they, altogether, have not built half as many rounds in the practical
ladder of “thrift” as the poor workingman who successfully induces his
next door neighbor to save one dollar a month out of his _waste_ money,
and with it subscribe for one share of stock in a well-managed building
society. Building society advocates have done much inducing, but always
in a practical way. They have not merely proclaimed that “economy is
wealth;” that “the best security for civilization is the dwelling,” but
they have taken the arm of their friend and neighbor and have led him
to the society meeting-room and shown him just how they saved their own
money. They have also taken them into their own homes and told them,
“This is my own home, paid for, or nearly so, through the aid of the
building society.” In this way lessons in the practical benefit of
thrift are daily given.
“Examples demonstrate the possibility of success,” said Colton many
years ago.
Alexander Dumas brought the matter home to the door of every man when
he said, “All the world cries, ‘Where is the man who will save us?
We want a man!’ Don’t look for this man, you have him at hand. This
man—it is you—it is I—it is each of us.... How to constitute one’s
self a man? Nothing harder if one knows not how to will it; nothing
easier if one wills it.”
It would seem that building society advocates were created to teach men
how to will it. In this line of work they have certainly been eminently
successful. To what class of citizens do these advocates belong, good,
better, or best? In the early history of these associations they were
organized and almost wholly managed by mechanics and laboring men;
managed honestly, conservatively, and successfully; and to this “class”
belongs the honor of organizing, conducting, and carrying to a point of
magnitude and usefulness, that commands the admiration of financiers
the world over, the building societies as conducted in Pennsylvania and
other States.
The honest, thrifty home-seeker has proved himself to be the “best”
citizen so far as managing a building society is concerned. When
failures have occurred, the main causes have been the introduction
into the management of financial ideas emanating from the brains of
theoretical bankers and literary economists.
The man who works at the bench mending shoes has a better idea of
what a dollar will do than the man who has at his command hundreds
of thousands of dollars belonging to other people, but who never was
blessed with the necessity of earning a real dollar by his own labor.
The conservative building society is one of good common sense and
not of class. It would be difficult to bankrupt a building society
conducted by men endowed with honesty and good common sense. The
“better citizen” is the man who spends less than he earns, pays his
debts promptly, would rather give his neighbor a dollar than steal a
dollar from him, looks upon the home institution as holy and sacred,
strives to own a home of his own, obeys the laws and looks the world
straight in the face. This “class,” without a penny to begin with,
caused Philadelphia to be known the world over as “the City of Homes.”
In the many interesting cases of men redeemed from the habit of
unthrift through the agency of building associations, and placed on
the road to moderate fortunes, there are sometimes two sides to the
story. One side is that related by the individual who has been saved
from future poverty, and the other side that which could be related by
the wife and mother, if she did not prefer and really strive to hide
from the outside world the life she had been leading, its trials and
gloom. The man simply tells how many days in the week he preferred not
to work, and how he never tried to save a penny. The wife could tell
how little the husband brought into the home in the way of money, and
what her awful anxiety had been. One side is public property, for it
is told by the husband for the purpose of inducing others to make a
new departure on the road to thrift and home-ownership. The other side
is supposed to be sacred, but it is only a secret in a sense that it
is not proclaimed. No man who is often voluntarily away from his work,
having a “good” selfish “time,” spending the earnings of days of
actual work, need imagine that his friends and neighbors are ignorant
of what the life in his home is, for it is as plain to all as if the
house was constructed of clear glass.
Every man of good health, who will make an honest and determined
effort, has it in his power to change such a home as has been described
into a palace of joy, comfort, and happiness, and even beauty.
There are many thousands of men and women throughout the land who would
not to-day have their own roof over their heads but for the building
society and the thrifty habits acquired through it.
[Illustration: ROW OF $1400 HOUSES.]
The officers and members of these societies are men who have, by
degrees, worked their way on the path to independence, and they are
highly respected by all who know them, and pointed out as examples by
their neighbors.
Members of these societies, after becoming firmly established in
thrifty habits, delight in relating their own experience as well as
that of others. There are thousands of interesting cases on record, of
which samples are given below:—
A short time ago, at a house of mourning, the members of the family
called the writer’s attention to a girl about fifteen years of age, who
had volunteered her services to the family until after the funeral.
This remark was made: “Our case is sad enough (the death of a father),
but the child you saw at the door has a father who has been confined to
the house with a lingering illness. There are several younger children,
and one girl older than the one you saw. The two girls have been
working in a mill, but on short time. Their case is sadder than ours,
and they were the first to volunteer to help us.” The above is the sad
part of the story, but there is a silver-lined side, since ascertained.
The father joined a building society some years ago and bought a house
for $2000, and while on his sick bed received a paid-up deed for his
home, the building society shares having matured.
It is now twenty years since a big, strong man, under the influence
of strong drink, visited the office of a building society secretary
and asked if a Mrs. —— had any shares in the society. The books were
examined and an affirmative answer was given. The next question was,
“How much has been paid in on the shares?” Answer, “Three hundred and
sixty dollars.” The inquirer brought his fist down on the secretary’s
desk and exclaimed:—
“So it is true, is it? I will stop that game; that woman is my wife,
and I have just heard that she is going to draw out the money and run
away.”
The secretary measured the man, and, risking a fight, determined to
hasten a climax.
“So you are the husband of Mrs. ——, are you?”
“Yes, I am.”
“And you are drunk?”
“Yes, sir.”
“How long have you been drinking?”
“For a long time.”
“Have you given your wife any money lately?”
“No, sir.”
“Have you given her any of the money in this society?”
“I don’t think I have.”
“Your wife takes in washing and goes out house-cleaning, does she not?”
“Yes, sir.”
“You eat at home without paying anything towards the support of the
house?”
“Yes, sir.”
“You have nice children, and your wife takes good care of them?”
“Yes, sir.”
“You admit that all this is true?”
“Yes, sir.”
“Now, will you answer me an honest question?”
“I will.”
“Don’t you think that you are just the kind of a man that a good woman
like your wife would be justified in running away from?”
“I do.”
The secretary asked who told him that his wife was going to run away;
and he answered that it was a friend.
[Illustration: PLAN OF $1400 HOUSES.]
The secretary then addressed him as follows:—
“When your wife comes to the society, I have noticed that her hands
were sometimes split and bleeding from hard work, and I know that she
is saving this money to keep you and the children from the almshouse.
In the first place, you should give up drinking and keep away from the
people who have been talking against your wife; and then I would advise
you to go home at once and tell all to your wife, and get down on your
knees before her and ask her pardon.”
To the utter surprise of the secretary the man shook hands with him and
emphatically gave his word that he would act on the advice given.
Not the strangest part of the incident is that the advice was exactly
followed. From that time until now the man has abstained from drink. As
soon as he got work he took shares in the society, and in a few years
three of his children had subscribed for shares. Only recently two of
the children withdrew shares to buy homes of their own. This is the
kind of practical work done by every building society in every State
in the Union, and the State as well as the entire country is the gainer
by it.
Of course it goes without saying that the building society knows no
secret plan for the payment of dues and interest greater than the
borrower can afford. It does, however, point out a way for every man to
gain a home of his own, but the price of the house must be in keeping
with his income. If this rule is not observed the result is almost
always failure to gain the desired object. It is an old saying that it
is almost wise to go in debt for a home, but it is decidedly unwise to
contract for a home that requires every dollar of income to keep it up.
Every home buyer should allow himself some margin in order to provide
for the possible rainy day. The man who cannot save over twenty dollars
a month outside of actual living expenses commits a serious error when
he signs a contract requiring him to pay twenty-five dollars every four
weeks. In doing this he robs himself first, and, second, is unfair to
his family. It would be to his advantage to place aside three or four
dollars out of the twenty dollars named as a nest egg.
This applies in particular to the careful man, who has been taught in
the school of thrift. The man who has been unthrifty may be able (when
he graduates) to save thirty dollars a month even when he thinks he
cannot save anything. Building society managers make it their business
to warn the thrifty not to undertake too much, and also to lead the
unsaving into habits of economy.
Only recently a judge on the bench said, “Such associations, when
properly conducted under judicious restrictions and management, are a
helpful blessing and encouragement to any community. But the ambitions
and extravagance of some borrowing members place themselves in a
burdensome condition.... Far better for the public, the associations,
and their membership, that many small loans be made rather than a few
in number and large in amount. Moderate homes and a moderate price
should be the criterion.... Their primary purpose was and should
continue to be to promote industry, frugality, and saving, and convert
the shiftless and discouraged tenant into a self-reliant and contented
home-builder.”
Building societies since their inception have supplied the means for
home purchasing, but these companies do not generally take any part in
the erection of houses. Most of the small homes in Philadelphia have
been built by those engaged in the business of building houses for sale.
Here is a picture of a row of houses containing seven rooms each. The
purchase price is $1400 each. The lots are 14 feet wide and 60 feet
deep. The houses are brownstone and brick. They have good cellars,
portable heaters, and range in kitchen, hot and cold water in kitchen
and bathroom. On the first floor there are three rooms,—parlor,
dining-room, and kitchen, and outside shed. Front door opens into
vestibule; entrance to parlor from entry, and also from dining-room.
Two front bedrooms over the parlor, bathroom in centre, and
sitting-room back of the bathroom. The dining-room extends over the
width of the lot less stairway room, and receives light from skylight.
The kitchen has a window opening towards the back shed or backyard. A
small toilet room occupies a small portion of the back shed.
[Illustration: BUILDING ASSOCIATION BANQUET.]
Any person known to be prompt in the payment of dues and interest
may purchase such a home by the payment of $200 in cash, and giving
a building society mortgage for the balance of the purchase-money,
namely, $1200.
The monthly cost would be about as follows:—
Monthly dues $6.00
Monthly interest 6.00
------
Monthly total $12.00