Show 1 ir t f U l Of Stock Selling J Ei ram Endeavors o Th Through Series of Arti- Arti Show Evil Possibilities Awaiting I Careless Purchasers of Build Building I ing and Loan Shares SharesE E tOrs tOr's Note his is the first in in a ser es' es of fifteen or orre articles on bUilding and loan toan activities in In Utah These re presented for for the purpose of f r les are not discrediting or this line of Investment Rather The Telegram S- S through a recital o of some ome recent history in this field Pen urage investors to distinguish h between the good and the hen purchasing st stock ck In bUilding and loan associations umber of these institutions are are sound and offer material II fits to stockholders without lurid promises of large inter nL turns Some on the other hand have used the f the better class concerns for selfish ends The Th pub fould h uld know one from the other Through these articles hopes to awaken prospective investors to the evil evil awaiting careless purchasers of building and loan By William tab as In every her ot-her other state staten Un n there is a rich and Ive arvest of easy money ot those e whose love for wealth l nC s Some hard to eatn w wk k i-k long and l e money and then show poor Judgment in the I Ing ng of It The promoter of oC and highly st ks and aDd other alleged se- se his trade In this fer ld ge em 5 his money by playing lI desire to make a money on a small Investment in jI her on a gamble Its It's thIs of folks that makes siness flourish Much has hassId sId nd much has been done IW Ti Y of l legislation to make th the high pressure pro pro- lS fock as possible matter of tact so much has hass s and so many warnings aito people to play safe in investment investment vestment of surplus earnIngs b i ade possible the biome me new stock concerns of the oldest safest o t plans of savings wage that earner of loan associations n 1 recently it has been sailing for certain stock lb Iding and loan toan apparently organized for the thee e ef it enriching the Inside orthan or- or than for the pro pro- and safeguarding of funds p public Thanks to a hardig hard hard- ig and corn com teta taIDe e bank examinerS some bl le l. l reforms have been 4 lao a n new w taw law although poor one has been iia tt the e governing d that now there Jl f be beless less of the enor- enor that hat r records cords show t some of the stock Ji and o c 11 thi state in S t WI Way Y to toney Money ney i ag na aAd d loan associations o regarded as an In- In L 1 this this- country It Is IsI I they offer olter about th tha the a tIe average wage vage I o save enough money to toI I wn home They afford a joca number of wage earn earn- f and by II n o their earnings In to to build up a amount of l that is put ra nd used to build homes this wod d be a mutual tI W ith a Very ery low overl over over- l J ot of earning and Oits members It uses Its ina ia clas class of business in IfO commercial banks do not nota a 0 c compete Every member t ts from tl th earnings When r makes a loan on his and nd pays Interest he gets artof of that interest In earn earn- he etore while ho he may be beLi r cent on his loan he heck Li ck much of that tha in earnings own interest in the mu- mu and is In conse- conse ly paying a small rate reat F FJ J a business and andIS IS b e for thousands upon n homes in Utah alone ad wa wage e earners hundreds of dollars In Utah the mutual ig loan oan association Idea at root In Salt Lake there r t arge mutual building ana ano What they have r their members during long years ot of beneficial ex- ex 3 wili iII be told later These I associations are an axiom Cettl n for building and loan ris The oldest were or- or the early SOs and have n do through the half or cent Century ry of business a 1 t cannot be questioned Ie associations have been op- op J with the lowest possible und and dle dl- dl I se e e without any profits One On secretary or and possibly a clerk or orji ji fi extent of paid iare n no expensive offices ol ra are not even en thought orl Or are re high commissions of of- fO for building end and loan IlU ns f Utah were con con- drand dand grew on such conser- conser that their ster- ster rePresent the peak of safeness and to join one was wasand and now is tu to become known as a a sensible saving p person In In the COIn COIn- Invites Confidence Of Wage Earner It therefore doesn't take a Houdini Hou- Hou dini dihl to solve the reason why the mention of building and loan should now invite complete confidence of ofa a a. wage earner desirous of settling In a community and raising a lam lam- Ily in his home of state to write laws on our statute books to prevent fraudulent fraud fraud- operation of unscrupulous money grabbers under the guise ot of building and loan Joan associations was probably due to the fact that the building and loan associations had reputations so far above reproach it was never given ghen a thought In Inthe Inthe the mad scramble cramble to put protectIve statutes on the books With everyone warning the wage earner to bf be careful ot of wild promotions promotions promo promo- and put his money In safe safekeeping keeping it was was therefore easy for some high pressure salesmen to sell stock in build building in and loan making it appear that It was about the same as putting money In a savings bank and earnIng a much higher rate of interest These high pressure salesmen didn't tell victims that they would have to make monthly payments ts for Cor eleven cleven months before they were vere even en credited with one monthly Instalment In- In didn't tell them that if they found it impossible to togo togo go through with the regular Instalments ments that pra practIcally all they had paid in for twenty three months would be lost t oi 01 that it they should die in this time their widow and children would get little or none of the money paid Into the corpora corpora- tion They didn't tell these wage earners th that t some of the the stock con con- l cern s lJ tn Under the law up until a year ago go It was only necessary to pay up about 5 per cent ot of the capital stock In some instances the balanc balanc bal bal- anc came from the stock bought by outsiders to enrich the In elders rs Withdrawals Wipe Out Much Savings HIgh pressure salesmen sent out by certain companies didn't make It clear to pr that only a small proportion of people who make regular payments on savings oV over r a long contracted period pe- pe nod kept It up to a maybe one in ten They didn't tell them that th the withdrawal charges and other expenses charged against them would practically wipe out the best part of their supposed savings unless they went through with the long and tedious contract U It was not customary to let the public know that the salesman got ot othis his commission commission-at one time lime as high as I 5 per cent on the entire amount contracted for and got It out ot of he ha payments made Operation of building and loan companies for tor years was practically practical practical- ly iy without regulation under the laws of the state Even so abuses are ot of recent origin and perhaps may be to this Before Be- Be fore Core the last state legislature got busy and passed the regulatory as laws poor as they are er- er taming to building and loan asso- asso cl the state slate bank examiner was powerless to prevent any person person per per- son or group of persons from Incorporating incorporating in- in such an association Request to Organize Refused Here is an actual case In poi point An attorney who had a reputation In the community that plight might ence the average citizen to believe he would In no way be connected with a scheme to abuse their confidence con con- asked the state bank examiner ex- ex for a permit to rile file articles of Incorporation fol for a building and I Iloan loan association The bank corn com missioner with the welfare of oC the public In mind refused to grant his request after looking over the plan The attorney declared he would hale him Into court und and force Coree him to give time the permit The bank ex- ex went to the attorney general to study the following statute nes- nes amol among the state bankIng laws Commissioner has lIas Discretionary Powers When The bank commIssioner commIs- commIs abner shall have discretIonarY ry power pow pow- er in the approval of articles of Incorporation incorporation in- in corporation or authority for such In the articles outlined ot Of Incorporation and laws by-laws submitted submitted sub sub- for approval does not compi corn com pi ply with the statutes governing gO associations as- as There were no statutes governing go these building and loan association the attorney general was Lions tion and amid on page 2 FRAUDULENT USE OF STOCK SELLING RIGHTS EXPOSED Continued from pass pase 1 to advise that the lb bank com com- r must INu a permit for forthe forthe the Incorporation of 01 the and aDd loan association In notwithstanding that the proposed articles him that It would not be tor t L Interest of the pU public tree is the statute that stood toOd on the book of Utah UP until the last state tt legislature met mt Building and Loan As- As U The capital named In arU of el Incorporation shall hall betoken be token to mean tb authorized capi- capi tei tal and the be association may commence com com- mence business when I per cent Is subscribed and the other of the law have been d with State Officials Were Is It any wonder that bat building and loin lOAn associations sprung ut up like mushrooms after aner a spring shower State Hute were pow pow- ends to stop atop tram them At the last state legislature ure officials of the old mutual the state bank examiner and others other Interested inthe In the tho welfare or the communities ot of the state attempted to get l Uon passed that would end abuses Politicians opposed this thle legislation legisla- legisla Uon tion perhaps because they were Insiders In the tho stock selling lIIng building build build- ing and loan associations It seemed to be cut and dried that taws should not lIot be enacted that would Interfere these thee operations Some of th the pt le In modified form w was enacted with the teeth d. d some new were given the tt crate to b bank r Ie examiner ex These ne made It possible for him to give lye some protection to the public These Thee powers have enabled him to compel a atral straighter and more respectable re- re path I Public opinion should bould be so 0 strong by the time the nut next tote atit legislature meets meet that the reforms In the laws to building and loan associations should go o through In the same cut and dried manner as aa they at scent em to have bave been barred at the last sea sea- lion slon One reform passed p that dId away with the evil ot of permitting build build- In log and loan associations to organ organ- tae with only 6 5 per cent or of the tho capital capi- capi tal 1 paid UP And It Is well to take lot Got that since this law was passed palled no request has haa been received by the state tt bank examiner for permits to tofile III file articles s of Incorporation for building and loan Joan associations The taw law reads Sec 2 Guaranty Capital plus The capital named In the or of IncorporAtion be b. betoken token ken to mean the capi- capi tal An or organized without with with- out permanent capItal may commence com coto- mence business when S per cent of oC oCHs Its Hs authorized capital stock alock Is subscribed sub sub- scribed and the other requirements of the law have been complied with organized with permanent per per- manent capital shall not be granted certificate of oC Incorporation until It shall appear by affidavit of at least three Incorporators that such auch corporation corporation cor- cor has paid up cash guaranty or permanent capital of not less than provided however that the aggregate of paid up guaranty guar guar- nty anty capital stock or paid up permanent permanent per per- manent capital stock or both such guaranty capital stock and p permit hent capital stock or surplus of oC every ery such building anti and loan toan asso- asso issuing instalment or tullY fully paid aid investment In c or must equal the following percentages percentages per per- of Its im estmEnt c certificates catu cates or both must equal th the tol lowing percentages of o Its invest ut certificate liabilities I 1 Seven Se and one halt per er Of any amount up t to and Including two million dollars 2 Five per cent ot of any amount tn lit excess of two million n doll dollars rs One or of the obnoxious features ot of certain stock selling building and loan lonn associations has been the tremendous tremendous tre- tre losses to nt put pur chasers ot of shar shares s when Were made A high pressure agent for fot the com company pan with the th high and reputation or of the mutual building and loan ions In the hind ot of the vl tl n might Inveigle n a wage earner r to put t this his money Into his building an l loan Ican with the glowing glowing- promise pr of 8 per cent Or mote more Interest rland rl and as safe as any sa savings batik bank Old Withdrawal Law Is Cited H here re Is the old law on witH withdrawals 1 1109 04 Payments Withdrawals Withdrawals With With- A borrower may repay aloan n a loan at any time upon duly complying com com- plying with the t e s ot of the charter and laws by-laws In n relation to the payment ot of loans and any stockholder to withdraw from the corp corporation shall have hav power to do so by thirty days days' notice of his his Int intention to withdraw when he shall be entitled d to receive the amount paid In by him and such Interest th thereon reon or sUch proportion of the profits there there- oh on less all tines fines and other Charges as the bylaws Vs may determine provided pro pro- ra- ra vided that at no time shaH mor more than one halt of at Ut the fUnds ot of the thet t of t the cOrp corporation ration b bit all ati- to the tho demands mands d or of withdrawing with with- drawing stockholders rs without the c consent of the board of directors and that no stockholder shall be entitled to withdraw whose st stock k Is held by the association for 01 security Upon the death ot of a stockholder r. r his legal representative be entitled to receive the full tutt amount lipid ld In by him on all h Shares nut ntH borrowed upon or pledged to the association ns as collateral security and legal le-al In- In st thereon after deducting all charges that may be due on the st stock ck but no tines fines shall be ch charged to It a dece deceased S d members member's account from and after his decease decetise unless ss the legal representative of such decedent de- de t cedel assume the t future ture payment of the dues The hl-g hl r In the wOodpile here bere was the statement less ess aU all fines and other charges as the by laws may determine The bank commissioner might an lation charging ex ex- unreasonable fines and other c charges arges against The officers ers might be hall halted d before re Ue the securIties Or before before be- be fore himself and made to correct the the- abuse to a great extent What would happen As the next directors directors' tors' tors meeting the by taws would ala again n be changed to the old abusive rates The last legislature Je did correct this law In a measure although It itis is II still tar far from to the stockholder as will be shown lat latEr r. r Following Is the new Sec 4 Expense Withdrawals wals- wals Payment Payment for tor dec decadent dent tny ny building and loan onn assocIation may charge against dues or earn earn- arnIng arn- arn log Ing such amounts for tor and operating expense as the articles or bylaws baws may provIde consistent however with Its obligation to pa pay the withdrawal value aue of Its stock or certificate a. a as hereIn prescribed An Any stockholder or Gr Investor desiring to t. t withdraw from any such corporation corporation corpora corpora- tion or to surrender a |